The Income Tax Act of 1961 lays down several guidelines for the sale and acquisition of real estate. One such guideline under Section 194-IA dictates that a buyer acquiring an immovable property has to pay a TDS (Tax Deducted at Source) deduction for property exceeding ₹50 lakhs. This TDS is preceded by filling out Form 26QB. Form 26QB, also known as 26QB challan, is usually deducted at the rate of 1% if your property transaction is eligible for it. In this article, we are going to shed light on all the aspects of Form 26QB.
What is Form 26QB?
Form 26QB is the form that a buyer fills to file TDS on the sale of immovable property. The Income Tax Act, 1961, under Section 194IA, requires an individual or HUF member buying a property valued at ₹50 lakhs or more to deduct the TDS @1%. The buyer, in this case, files a TDS return in Form 26QB. Buyers also need to certify the TDS deduction by filing Form 16B within 15 days from the due date of filling Form 26QB. Filling out Form 26QB online requires information like the date of purchase and other transaction details, such as the amount paid for the transaction, PAN numbers of the buyer and seller, etc.
Requisites for Filing Form 26QB
While filing Form 26QB, there are some integral documents and information which you may have to disclose or submit in the process. These documents include:
- PAN (Permanent Account Number) of seller and buyer
- Address details of seller and buyer
- Property details
- Contact information of buyer and seller
- Amount credit or debit
- Tax deposit details
How to Fill Form 26QB?
The process of filing Form 26QB is easy and straightforward. All you have to do is follow the below steps-
- Visit the official website of TIN Protean (https://www.protean-tinpan.com/)
- Click on the ‘Services’ option on the home screen and select “e-Payment: Taxes Online”
- Tap “TDS on sale of property” and choose “Online form for furnishing TDS on property (Form 26QB)”.
- Choose the applicable challan – “TDS on sale of property”
- Fill in the complete form with details (PAN of the buyer and seller, property details, the amount paid, details of communication between seller and buyer, and details of tax deposit).
- Once you have filled in all the necessary information, submit the form to move further with the process.
- A confirmation message will be displayed, along with two options: “Print Form 26QB” and “Submit to Bank.” You may also see an acknowledgement number on the screen. You can choose any as per your unique requirement. Save it for future purposes.
- Now, tap “Print Form 26QB” to get out the hard copy of the form. Pay online through Internet banking by clicking “Submit to Bank”. You can visit the payment page of the bank to complete the process.
- After making the payment, you will find a counterfoil of the challan stating CIN, details of payment, and bank name (via which you paid online). It is proof of your successful payment.
If you choose to make the payment of TDS using Internet banking services, then you can do so via the authorised banks mentioned below:
- Allahabad Bank
- Andhra Bank
- Axis Bank
- Bank of Baroda
- Bank of India
- Bank of Maharashtra
- Canara Bank
- Central Bank of India
- Corporation Bank
- Dena Bank
- HDFC Bank
- ICICI Bank
- IDBI Bank
- Indian Bank
- Indian Overseas Bank
- Jammu & Kashmir Bank
- Oriental Bank of Commerce
- Punjab and Sind Bank
- Punjab National Bank
- State Bank of India
- Syndicate Bank
- UCO Bank
- Union Bank of India
- United Bank of India
- Vijaya Bank
Form 26QB Due Date
The buyer needs to furnish Form 26QB within 30 days from the end of the month in which the tax deduction is carried out. An example below explains the calculation of the due date for the buyer.
Example: Anshul bought a property from Rahul, and the total sales consideration amounted to Rs. 50,00,000. The payment was made on 20th September 2022. As per the tax regulations, Anshul must submit Form 26QB on or before 30th October 2022. Failure to file the return within the due date results in late fees of ₹200 per day, not exceeding the amount of TDS deducted.
Consequences of Making Late TDS Payment
If Form 26QB online payment is delayed, it may affect both buyer and seller. Some of the significant consequences that a late TDS payment may have are:
- As per section 234E, the taxpayer faces charges if Form 26QB submission delays or is not filed on time.
- If the failure to file the 26QB TDS payment persists, the buyer will encounter a penalty of ₹200 until the filing of Form 26QB.
- In addition, a fine under section 271H will be levied along with the penalty of ₹200 given above.
- The responsibility for paying interest on any delayed tax deductions and deposits is imposed on the buyer.
- In case the tax deductions are not completed, the monthly interest will be charged @1%. This interest amount is charged between when the tax is set to be removed and when it is deducted.
- In case the tax is not deposited, interest will be charged @1.5% per month from the date of deduction until the actual payment is made.
- If the buyer fails to file taxes on time or does not file at all, the seller will not be entitled to claim the tax credit.
Conclusion: Form 26QB is a crucial document to furnish when you enter into a property sale transaction exceeding ₹50 lakhs. As we saw above, Section 194-IA of the Income Tax Act requires the buyer to pay the TDS payment @1% by furnishing Form 26QB. You must fill up Form 26QB based on the deadline calculation discussed above. Not filing this form may land the buyer with severe penalties and interest charges. With all the details regarding Form 26QB, the buyer can easily submit the TDS payment via the authorised banks provided in the article. Make this payment on time by filing Form 26QB to avoid all the penalties.