Overview
For the purpose of paying TDS (Tax Deducted at Source) on the sale of real estate, Form 26QB is a tax-related form. It is generally utilized to record and pay the TDS amount to the government for property transactions with a consideration amount being more than 50 lakhs and is applicable under Section 194IA of the Income Tax Act of 1961. This form helps with the appropriate documentation of property transactions and assures compliance with tax legislation.
Importance
- TDS Compliance: Form 26QB is essential for ensuring that TDS requirements are followed.
- Legal Requirement: Form 26QB filing is necessary for the purchase of immovable property. It works as a protection against conceivable disputes or non-compliance problems and as proof of the TDS payment made.
- Transparent Property Transactions: Form 26QB encourages transparency in real estate transactions by demanding the disclosure of specifics on property transactions.
Who is required to fill and submit Form 26QB?
The information with respect to tax deducted at the rate of 1% on the total sale consideration on the transfer of immovable property by a non-resident Indian (NRI) or a foreigner in India is done via Form 26QB. It is submitted by the purchaser of the property within 30 days from the end of the month in which the tax was deducted. It is to be noted in case of multiple buyers and sellers Form 26QB shall be submitted separately for each. The buyer must also obtain Form 16B and provide it to the seller.
Steps to file Form 26QB
Step 1: Identify the relevant data required for filling out the form:
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- Name, address, PAN (Permanent Account Number), and contact information for the seller and the buyer.
- Address, sale consideration received, cost of the property, capital gains earned, and date of agreement or transaction for the property.
- TDS payment information: TDS deduction amount, payment method, and challan information.
Step 2: Visit the company website:
Go to TIN Protean (formerly NSDL eGov) website: https://www.protean-tinpan.com/.
Step 3: Choose Form 26QB:
Under ‘TDS on sale of the property’, click on “Online form for furnishing TDS on the property (Form 26QB)”. Select the applicable challan as “TDS on Sale Property”.
Step 4: Fill out the form:
Give specifics about:
- PAN of the seller & buyer
- Communication details of seller & buyer
- Property details
- Amount paid/credited & income tax withheld (TDS) details
Step 5: Submit the Form
There will be a confirmation screen. ‘Print Form 26QB’ and ‘Submit to the bank’ will be the two alternatives that are presented on the screen following confirmation. Additionally, a distinct acknowledgment number will be shown. Note down the number.
Step 6: Payment
On successful processing of the payment, a challan with the bank name, payment information, and CIN will be displayed once the payment has been made. The challan is regarded as payment documentation.
Common Mistakes to Avoid While Filing the Form 26Q
Incorrect Permanent Account Number (PAN) or Tax Deduction and Collection Account Number (TAN): Make sure you give the correct PAN and TAN for the buyer and seller. Verify the details to make sure there are no mistakes.
Incorrect challan information: Verify the challan information, including the BSR code, the date of deposit, and the serial number. Any errors in these specifics could result in the TDS amount being credited incorrectly.
Inaccurate Property Details: Provide accurate and thorough information on the property being sold, including the full address, the type of property, the neighborhood, etc. Any inconsistencies in these facts could be problematic throughout the verification procedure.
Inaccurate TDS total: Determine the TDS total appropriately based on the relevant rates. Any mistakes in the TDS computation could lead to improper filing, which could lead to fines or notices from the income tax department.
Late filing: Ensure that Form 26QB is submitted by the income tax department’s deadline. Penalties and interest charges may apply to late filings.
Non-payment of TDS: It’s critical to give the government the TDS amount that was deducted from the sale of the property before the deadline. Penalties and interest costs may apply for late or non-payment.
Failure to issue Form 16B: As the purchaser, it is your duty to provide the seller with Form 16B as evidence of TDS payment to the payee within 15 days from the due date for furnishing the challan-cum-statement in Form 26QB.
Conclusion
In conclusion, Form 26QB plays a crucial role in the process of tax compliance and transparency in India. This form serves as a means to facilitate the payment of tax on the purchase of immovable property. Over the years, it has proven to be an effective tool in streamlining the taxation process and ensuring accountability in real estate transactions.
Form 26QB serves as a comprehensive document that captures relevant details of the property transaction, including the buyer’s and seller’s information, property details, transaction value, and the amount of TDS deposited. By mandating the submission of this form, the government aims to curb tax evasion, promote transparency, and maintain a robust system for tax collection.
