Form 26qb: Penalty, Certificate, payment in 2024

The real estate industry in India is often in the news due to significant financial scams. It is due to the absence of a proper and standardised system that helps manage the money during the transfer of immovable property. The form 26qb is a return-cum-challan form with which the buyer has to deduct TDS as mentioned under Section 1941A of the Income Tax Act, 1961. Tax gets cut off at the source itself, thus minimising corruption. Read on to know more.

What is Form 26qb?

As mandated under Section 1941A of the Income Tax Act, 1961, the government has laid down several rules for the transaction of immovable property. In this case, the buyer (or the deductor) has to deduct TDS if the transaction value exceeds 50 lakhs. The deductor will also be responsible for providing Form 16B to the seller. Now let's take a look at some of the salient features of the Form 26QB of Income Tax:

• During the completion of a property transaction, the buyer has to deduct TDS at 1% of the total transaction value.
• TDS mentioned under Section 1941A will not be applicable for agricultural lands.
• The buyer cannot deduct TDS on immovable property valued at less than 50 lakhs. For properties that cost more than this amount, 1% TDS has to be paid on the whole transaction amount. For example, if the property you are buying costs 60 lakhs, then TDS has to be paid on 60 lakhs and not on (60-50lakhs) 10 lakhs.
• For payments in instalments, TDS is also proportionately deducted for each instalment individually.
• The buyer does not need a TAN (Tax Deduction Account Number). However, PAN is mandatory for buyers and sellers if a TDS deduction is made through Form 26QB.
• After deduction, the buyer is responsible for furnishing the TDS certificate and Form 16 to the seller.

Penalty For Failure to Deduct TDS Using Form No 26qb

Here are the applicable penalties under various types of default:

• Failure to deduct TDS will lead to a penalty of 1% interest on the TDS dues.
• If the buyer fails to remit the TDS to the government, a penalty charge of 1.5% is slapped on the TDS amount due.
• In situations where there is a delay in filing TDS returns, a hefty penalty amount (Rs 200) is charged for each day of default.

Form 26qb Certificate Download

Follow these few steps as mentioned below:

1. Visit the TIN NSDL website (https://www.tin-nsdl.com/index.html) . Under the "Service" tab, choose the "Epayment" Pay taxes online" option." 

2. Scroll down, and in the box named "TDS on Property: Form 26QB", click on "Proceed".

3. You will be redirected to a new window. First, you have to input all taxpayer information. In the "Tax Applicable" section, choose 0020 if you are paying corporate tax. For others, click on 0021—next, select assessment period, payment type, and residency status. You also need to provide your details along with your PAN. You also need to input the seller's PAN here. Then click on "NEXT". 

4. Fill in all the other necessary details, including the property details. Then, you will finally reach the "Payment" page. After the payment via net banking, you can download your Form 26Qb.

Form 26qb Payment

For making a form 26qb online payment, you click "Proceed" from the payment page and pay via net banking. 

Following that, you can visit the TRACES website and register on TRACES as a Taxpayer by simply providing the PAN number and challan number (Form 280 or the Form 26QB challan). Then, get your Form 16B and download it. Remember, this Form is to be mandatorily issued to the seller of the property.

Form 26qb Sample

Here is how a typical TDS form 26qb looks like.

Print Form 26qb

The form 26qb procedure also involves printing and downloading this Form along with a form 26QB acknowledgement. This acknowledgement is an essential piece of document, especially if you want to pay your TDS offline. Read on to know more about this.

Form 26qb Due Date

As mandated, the buyer or the deductor is responsible for submitting form 26QB. The buyer must make Form 26qb payment online within 30 days of the month ending in which TDS has been deducted. After the TDS deposit, the buyer must also issue a TDS certificate to the seller within 15 days of the property transaction.

Form 26qb Offline

If you do not have active net banking, you can also opt for the "E Tax payment on the subsequent date" option, wherein you have to visit your nearby bank branch to pay TDS and obtain your challan for Form 26QB income tax. Then, click on "Proceed" on the payments page, and you will be issued a form 26QB receipt along with an acknowledgement slip. Download this form 26Qb with the acknowledgement number. This slip will be valid for ten days from the date of issue. Once you make the payment at the bank, they will generate your Form 26QB challan or Form 280 for you.

Form 26qb Challan

This is how a form 26qb challan or Form 280 looks like. Note that the buyer should have a copy of this during the transaction of the property.

Date of Tax Deduction in Form 26qb

TDS on the immovable property has to be paid within 30 days from the month ending when TDS was deducted. Thus, if the buyer deducts TDS on March 15, 2021, this TDS has to be paid within 30 days from March 31, i.e., April 30, 2021.

Form 26qb Procedure

As discussed above, you have to log into tin.nsdl.com and follow steps 1-4 for Form 26QB online payment.

Form 26qb Certificate Download

Follow these steps for the form 26QB download after payment:

1. Visit the TRACES website and “Register as a Taxpayer”. You can register by providing your PAN card details as well as the challan number.

2. On completing the registration, you can obtain your TDS certificate or Form 16B.
3. After approximately one week, check your Form 26AS once. By this time, the TDS payment should be ideally reflected by now.
4. To download, simply log in with your credentials and click on the "Download" Tab. Under that tab, click on Form 16B (for the buyer).
5. You can fill in the seller's PAN details and acknowledgement details related to the property transaction and then click on "Proceed".
6. After verifying the details, "Submit Request".

After a few hours, your 26QB form download request will be processed. You can find the download request status as "Available". Then, you have to download the TDS certificate.

As you can see, Form 26Qb is an essential document for deduction and filing for TDS. Unlike other taxes, the buyer is responsible for a tax deduction and submission to the government, then remitted to the seller. This way, the chances of corruption and money laundering becomes significantly less. If you need any further help in filing your tax returns, you can contact NoBroker legal experts. Wish to know about tax saving investment options? Visit our blog site for detailed information.

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