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What Is Form 26QB & TDS On the Sale of Property?

By IIFL Home Loans | Published On Mar 07 2024 10:50 AM 1 min read 105 views 10709 Likes
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Property Transactions

Property sales in India have several financial and legal responsibilities for both the seller and the buyer. One such requirement, covered by the 26QB Form, is the deduction and payment of TDS (Tax Deducted at Source) on the selling consideration.

IIFL Home Loans offers secured loans to businesses for construction, finance to real estate developers in the affordable housing sector, and home loans to individuals to purchase, develop, and renovate their homes. This article aims to give readers a thorough grasp of how to file 26QB and the TDS on the sale of property 26QB in real estate transactions.

What is 26QB Form?

The meaning of a TDS Form 26QB is straightforward. It's a form that buyers use to submit tax deducted at source (TDS) reports related to property sales. Section 194IA of the Indian Income Tax Act, 1961 governs its provisions, which the Income Tax Department makes. This form includes all the pertinent data for buying real estate, including the buyer's PAN number, the date of acquisition, and the amount paid.

Essential Elements of TDS Form 26QB

Here are some of the essential elements of TDS form 26QB:

  • Information about the buyer and seller: Form 26QB requests the buyer's and seller's PANs (Permanent Account Numbers). By doing this, the transaction is guaranteed to be accurately documented for taxation.

  • Property Details: The form includes vital details regarding the asset being sold, including the address, kind of property (commercial or residential), and amount of consideration of sale.

  • TDS Calculation: Using the selling consideration as a base, the buyer must determine the TDS amount. The TDS rate is typically 1% of the proceeds from the sale.

  • Payment Information: The form contains information about the buyer's TDS payment, including the bank name, challan number, and payment date.

How to File 26QB?

Here are some detailed steps about the process of filing the 26QB form:

  • TDS Deduction: By Indian tax legislation, the property buyer must deduct TDS from the amount they pay the seller. Typically, 1% of the sale consideration amount is the applicable TDS rate.

  • TDS 26QB Payment: The buyer must submit the TDS money to the government within the allotted time frame after deducting the TDS. You can make 26QB online payments or in person at financial institutions that have been approved.

  • Form 26QB Filing: The buyer must electronically file Form 26QB via the NSDL website following the TDS payment. The buyer must fill out the form with all pertinent information about the real estate transaction, including the amount of TDS withheld.

  • Creation of Form 16B: Upon the buyer's successful submission and processing of Form 26QB, a TDS certificate, known as Form 16B, is issued. You can get this certificate online from the TRACES website, which serves as documentation of TDS deduction.

  • Reporting in Income Tax filings: The property transaction must be included in the buyer and seller's income tax filings, respectively. The buyer must declare the TDS deducted, and the seller must report the sale revenues.

  • Importance of Compliance: Regarding real estate transactions, buyers and sellers must adhere to the requirements of Form 26QB and TDS. Penalties, legal issues, and delays in property registration may arise from noncompliance.

How to Download Form 26QB?

Following are the steps to download the TDS 26QB online form:

  • Visit the https://www.tin-nsdl.com/ website.

  • Go to the section on Form 26QB or TDS about property sales.

  • Choose the relevant evaluation year.

  • Enter the necessary information, such as the buyer and seller's PAN, the specifics of the property, and the TDS amount.

  • From the website, download the completed form.

Wrapping Up

Form 26QB is essential for enabling TDS compliance in real estate transactions in India. Property transactions can be made seamless between buyers and sellers by knowing the requirements of the TDS 26QB form and following the guidelines through IIFL Home Loans platform.

To prevent future consequences, all parties must prioritise adhering to tax legislation. Head over to IIFL Home Loans to learn more about seamless property transactions.

FAQs

Q1. Can we submit 26QB online?

The online statement/challan form 26QB is used to pay TDS to the government. When purchasing a property, the buyer must complete this form and pay the TDS within the allotted time.

Q2. Who can file the 26QB form?

The buyer has thirty days from the end of the month in which TDS was deducted to deposit TDS and file Form 26QB. If the transaction involves more than one buyer or seller, the deductor must submit more than one Form 26QB.

Q3. What distinguishes form 26QB from form 16B?

A return cum challan, or Form 26QB, is used to pay TDS to the Indian government. A TDS certificate, Form 16B, is given to the seller to deduct TDS from the buyer.

Q4. Who can file Form 16B?

The buyer must give the relevant seller Form 16B as soon as the tax money is deposited with the IT Department.

Q5. Is TDS refundable when selling real estate?

If the amount deducted exceeds the actual tax burden, the seller can receive a refund of TDS. The seller needs to submit an income tax return to receive the refund.

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