If you’ve recently purchased property or are in the process of buying one in India, you may have heard of Form 26QB. This form is a crucial part of the process, especially when it comes to paying taxes related to the transaction. Here’s a simple breakdown of what Form 26QB is, why you need it, and how to fill it out correctly.

What is Form 26QB?

Form 26QB is a tax form used for the TDS (Tax Deducted at Source) payment on the purchase of property. When you buy property worth over ₹50 lakh in India, you, the buyer, are required to deduct tax from the seller’s payment and deposit it with the government. This tax is known as TDS, and Form 26QB is the document that reports it.

Why Do You Need to Fill Out Form 26QB?

If you’re the buyer, it’s your responsibility to ensure that TDS is deducted and paid to the government. Form 26QB helps the government track that tax payment, so the seller gets credit for it when filing their income tax returns. If you don’t fill out this form correctly, the seller could face difficulties in claiming their TDS credit.

When Should You Fill Out Form 26QB?

The form needs to be filled out at the time of making the payment for the property. The TDS must be paid within 30 days from the end of the month in which the payment is made to the seller.

For example, if you pay the seller in January, you must deposit the TDS by the end of February.

Steps to Fill Out Form 26QB

Here’s a step-by-step guide to filling out Form 26QB:

  1. Visit the TDS Portal: Go to the official website of the Income Tax Department and log in to your account.
  2. Choose Form 26QB: From the available forms, select Form 26QB.
  3. Fill in Basic Details: You will need to enter details such as:
    • Your PAN number (as the buyer).
    • The seller’s PAN number.
    • The full address of the property.
    • The amount paid to the seller.
    • The TDS rate (which is typically 1% for property transactions).
  4. Payment of TDS: Once you’ve completed the form, proceed to make the payment through net banking or other available methods.
  5. Download the Acknowledgment: After payment, you’ll get a confirmation receipt. This receipt will have a unique challan number, and it’s essential to keep it for your records.
  6. Form 16B: The Income Tax Department will process the information and generate Form 16B, which serves as the proof that TDS has been deducted and deposited. This will be sent to the seller and you’ll be able to download it from the portal.
Key Points to Remember:
  • TDS Rate: Generally, the TDS rate is 1% for individuals, but it could vary if the seller is a company or if the buyer is a non-resident.
  • Late Payment Penalties: If you delay the payment of TDS, there could be penalties or interest charges, so it’s important to stay on top of deadlines.
  • Seller’s PAN: Ensure you have the correct PAN of the seller. If the PAN is wrong, the TDS credit may not be received by the seller.

Well, that was all about the TDS on immovable property, if you have any queries please get in touch with us.

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