What is Form 26QB?

As per finance bill 2013, TDS is applicable only on sale of immovable property whose value is equal or greater than Rs.50 Lakhs. Seller needs to obtain form 16B whereas buyer needs to obtain form 26QB in order to file TDS to the income tax department. 26QB form is basically a return cum challan filed by the taxpayer to pay TDS to the income tax department.

Payment of TDS on Sale of Property through Form 26QB

Requirements under Section 194-JA

The requirements under section 194-JA are as follows –

  1. Buyer of the property needs to deduct TDS at 1% on the entire selling amount. TDS needs to be deducted by the buyer not the other party.
  2. Tax need not to be deducted in case the selling amount is less than Rs.50 Lakhs. In case, payment is made in installments, there is a reduction in TDS amount of every payment.
  3. In case the buyer or seller is more than one, tax is still applicable on the entire sales amount.
  4. TDS needs to be deposited along with the form 26QB within 30 days from the month in which TDS has been deducted.
  5. PAN card of both buyer & seller should be mentioned in the form 26QB so that seller cannot avoid the tax on capital gain earned by him. In case the seller is not able to provide PAN, 20% tax is deductible on the same.
  6. It is mandatory for the buyer to obtain a TAN number.
  7. After TDS deduction, buyer needs to provide TDS certificate to the seller which is available on the website after two weeks of depositing TDS.

Payment of TDS on Sale of Property through Challan 26QB (Online or Offline)

The procedure of payment through challan 26QB is as follows –

  1. Go to the website link - https://onlineservices.tin.egov-nsdl.com/etaxnew/tdsnontds.jsp and click on form 26QB mentioned on left lower side of the web page to download it.
  2. Choose code “0020”(in case you are a corporate taxpayer) unless choose code “0021” under Taxpayer info.
  3. Provide the required information in the fields mentioned below and click on proceed.
  4. After clicking on proceed, a webpage asking for address details will be shown on the screen. Kindly mentioned your address details and click on next.
  5. After clicking next, you will arrive on property details section. Kindly mention all the property details for which you are filing the TDS and click on next.
  6. After clicking next, you need to fill the payment information. There are various payment modes available for paying TDS. Some of them are Debit card, credit card and Net banking.
  7. After the online payment, kindly note down the acknowledgement number (online procedure) or if you want to follow the offline procedure, kindly download the online receipt of form 26QB and submit the same to one of the authorized banks along with the cheque. The bank will generate your challan after receiving the payment.

Notice for Non-filing Form 26QB

An annual information return (AIR) has been sent by the registrar/sub-registrar office to the income tax department on day to day basis. This report contains the entire property transactions exceeding Rs.50 Lakh in value. In case, you are unable to file TDS at 1% on the entire property amount within a specified time to the income tax department, a notice will be issued by the tax department to the buyer of the property. Hence, it is mandatory for every taxpayer to deduct TDS on sale of immovable property.

Penalties Applicable on Non-Filing of Form 26QB

Interest on penalty Calculation
Non-deduction of TDS Interest is deductible at 1% per month from the date on which TDS is deducted to the date on which TDS is actually deducted
Non-remittance of TDS Interest is deductible at 1.5% per month from the date on which TDS is deducted to the actual payment date
Late filing fees Calculation
Under section 234E, late filing of Rs.200 per day In case of late filing or non-filing of form 26QB, a fee of Rs. 200 per day is to be given as penalty till the failure continues. The buyer would also be liable for late payments, deductions & interest.
Penalty Calculation
Penalty under section 271H Under section 271H, assessing officer may impose penalty at his discretion. This penalty is applicable on those taxpayers who are unable to submit the statement on time. Penalty under this section may vary from Rs.10000 to Rs.1 Lakh. In case TDS is deposited along with fee & interest as well as the statement is also submitted by the taxpayer within 1 year, no penalty will be levied.

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