If you’re dipping your toes into the world of property transactions in India, chances are you’ve encountered the term “Form 16B.” But what exactly is it? In simple terms, Form 16B is a TDS certificate that plays a crucial role in property sales. It’s the document that ensures that the right amount of tax is deducted at the time of property sale, bringing both the buyer and the seller under the tax umbrella.
In this guide, we’ll break down Form 16B, explaining its significance and shedding light on its role in property transactions. Whether you’re a first-time seller or a curious observer, this guide aims to demystify Form 16B and make the complex world of property taxation a bit easier to understand.
What is Form 16B?
Form 16B is a TDS certificate issued by the buyer of immovable property to the seller as per section 194-IA. This TDS certificate is accepted as proof of the amount to be deducted from the sale of the property. The buyer then deposits the deducted amount to the Income Tax Department after furnishing Form 16B.
However, it is essential to note that this form of TDS deduction is not applicable to immovable properties or agricultural land with a value of less than INR 50 lakhs. The TDS deduction on immovable properties is set at 1% of the entire sales value.
Eligibility Criteria for Form 16B
Every person who buys an immovable property of INR 50 lakhs or more must fill the Form 16B. A deduction of 1% is made on the property’s sale value. Once the tax is deducted, the buyer has to issue a TDS certificate (Form 16B) to the seller of the property.
Components of Form 16B
Form 16B has the following components, which must be duly filled by the buyer:
- PAN (Permanent Account Number) of the seller and buyer
- Payment acknowledgement number
- Assessment year for tax purposes
- Detailed salary breakup
- Benefits availed under Section 89 for relief in tax calculation
- Deductions are allowed under Income Tax Act (ITA).
Form 26QB is generally filled when the buyer who pays the TDS to the government gets a challan return as per section 26QB. This document is integral to furnishing Form 16B. Form 26QB provides information on the tax deducted under section 194-IA.
Form 26QB is filed within 30 days following the month of deduction. If your TDS deduction is given in instalments, then you are more likely to furnish Form 26QB for each instalment.
How to Download TDS Certificate (Form 16B)
Buyers can easily download TDS certificates from the TRACES portal. Here is the detailed procedure for downloading Form 16B for TDS deduction:
- Visit the TRACES portal (https://contents.tdscpc.gov.in/) and register as a taxpayer by providing your PAN.
- Log in to your account on the TRACES (TDS Reconciliation Analysis and Correction Enabling System) portal.
- Navigate to the “Downloads” menu and choose “Form 16B (For Buyer).”
- Provide the necessary property transaction details for which you need Form 16B. You must fill out details like the assessment year, PAN of the seller, and acknowledgement number.
- Click on “Proceed” once you have provided the information.
- A confirmation interface will appear. You need to review the information and tap on “Submit Request” to proceed with the download request.
- Upon successful submission, you will receive a message confirming the download request. Note the unique request number provided in the confirmation.
- To download the requested files, go to the “Requested Downloads” section on the portal.
- Use the request number to search for your download request.
- Once you locate your request, choose the selected row and tap the “HTTP Download” button to initiate the download process.
Due Date of Form 16B
Now that you are familiar with the Form 16B download process, you must know that Form 16B is furnished within 15 days by the payee from the due date of submitting Form 26QB. Once Form 26QB is provided, the payee can generate and download Form 16B from the TRACES official website.
How is the TDS Payment Deposited?
It is easy to make the TDS payment as a buyer of an immovable property. The Income Tax Department has made it easy to submit the TDS amount via online platforms. The taxpayer can use several Internet banking facilities to pay into the government account. Here is how to do it:
- Choose “Print Form 26QB” from the TRACES official website to generate a challan document.
- Print the challan and proceed to the authorised bank to deposit the TDS amount using a cheque or demand draft.
- You can also select the option “Submit to the bank,” which will redirect you to an online payment page with Internet banking facilities.
- Make the TDS payment online through any of the Internet banking facilities.
- Once the payment is made, you can view your CIN (Challan Identification Number), payment details, and bank details. You need to save these details as proof of payment.
By now, you must be well aware of what Form 16B means and its implication in the transaction of immovable properties. As a buyer, you are liable to pay at least 1% of TDS of the sales value of the immovable property. Besides downloading Form 16B, you may have to furnish Form 26QB to generate and download your TDS certificate. By utilising all the detailed steps mentioned above, you can easily generate Form 16B from the TRACES portal and deposit the tax payment to the government. While filling out all the forms, you must enter all your details cautiously to avoid any chance of revisions and corrections.