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Form 16 is one of the commonly known forms amongst the salaried individuals without which the salaried individuals often do not begin their Income Tax Return (ITR) filing. However, not all types of Form 16 are related to salaried individuals. Form 16B is one such type which is related to Tax Deducted at Source (TDS) for sale of property. This article aims to explain Form 16B, its components, how to download and file Form 16B? and other aspects related to the same.
Form 16B
Form 16B is an usual certificate representing Tax Deducted at Source (TDS), issued by the purchaser or buyer of the property to the seller. The tax so deducted is deposited by the deductor with the Government within the prescribed time limit. In the event of property sale, the applicable TDS is reflected through Form 16B. TDS on property is covered under Section 194-IA of the Income Tax Act, 1961. According to the said section, TDS is not applicable on agricultural and immovable properties whose sale value is less than INR 50 Lakh.
The buyer of the property should deduct TDS at the rate of 1% on the value of the property under Section 194-IA while making payment at the time of purchase of property. After depositing the TDS amount with the Government, the buyer must issue the TDS certificate, that is, Form 16B, to the seller.
Unlike Form 16, a TDS certificate for salary, and Form 16A, a TDS certificate for non-salary income, Form 16B ensures that the applicable TDS on the sale proceeds of the property is deducted.
Content of Form 16B
A Form 16B in general includes the following details:
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Certificate Number
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Last updated on
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Name and address of the Deductor
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Name and address of the Deductee
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PAN of the Deductor
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PAN of the Deductee
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Financial Year of Deduction
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Summary of Transactions
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Details of Tax Deposited and Credited
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Verification by the Deductor
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Place
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Date
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Signature and full name of the Deductor
Who should Issue Form 16B?
Form 16B is a certificate issued by the buyer to the seller of the property. It acknowledges that the requisite TDS at the rate of 1% on the value of the property, where the value of the immovable property, not being an agricultural land, exceeds INR 50 Lakh, has been deducted and deposited with the Government. Form 16B is useful for the seller for claiming TDS deduction while filing the Income Tax Return (ITR).
How to Download Form 16B?
Following are the steps to download Form 16B:
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If already registered, login at TRACES using the login credentials by visiting https://www.tdscpc.gov.in/app/login.xhtml.
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Navigate to Downloads Tab, select ‘Form 16B’ (for Buyer).
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Provide the details like: Assessment year, acknowledgement number of Form 26QB, and PAN of the seller.
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Under the Downloads Tab, navigate to the Requested Downloads section and download Form 16B.
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Form 16B can be downloaded or printed as per choice.
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Visit TRACES at https://www.tdscpc.gov.in/app/tapreg1.xhtml to register as a new user, if not registered already.
To download the Form 16B directly, visit https://contents.tdscpc.gov.in/forms/Form16B.pdf
A sample of Form 16B is presented below:
Form 26QB: TDS Return-Cum-Challan
Form 26QB is a return-cum-challan facilitating TDS payment to the Government by the buyer of the property. It must be submitted electronically for the tax deducted under Section 194-IA. The buyer should furnish Form 26QB within 30 days from the end of the month in which the TDS is deducted. For instance, if the payment is made by the buyer on 21st March and TDS is deducted on the same date, Form 26QB must be submitted by 30th April.
Where payments are made in installments, Form 26QB must be issued in respect of each installment or payment. Moreover, a separate Form 26QB must be issued for each combination of buyer and seller.
Payment of TDS
After the generation of challan for TDS payment via Form 26QB, the deductor is provided with the option to deposit the TDS either through cheque or through demand draft. If the deductor selects the ‘Pay at Bank’ option, he will be redirected to the payment gateway of the bank. Once the amount is paid, a challan counterfoil with the CIN, payment details, bank’s name, and other information is reflected to the deductor. The challan counterfoil acts as an evidence of the TDS payment. Later on, after 5 days, the deductor can opt for downloading the Form 16B from the TRACES portal.
Due Date of Issuing Form 16B
Form 16B must be provided to the seller by the buyer of the property within 15 days from the due date of furnishing Form 26QB. Form 16B is available for download from TRACES website after Form 26QB is duly furnished.
Form 16 vs Form 16A vs Form 16B
The following are the differences between Form 16, Form 16A, and Form 16B:
If Payer does not hold TAN?
To deduct and pay TDS to the Government, all deductors must possess a valid TAN. Moreover, it is mandatory to make use of TAN for all the further conversations with the Income Tax Department. In case of transactions involving transfer of immovable property, individuals are unable to use Challan No. ITNS 281 without TAN. Moreover, possessing TAN only for a single transaction is also not feasible.
Therefore, Section 194-IA provides an exception to the deductor, whereby, the TDS can be deducted and deposited without the deduction of TAN using a separate Return-Cum-Challan using Form 26QB.
Frequently Asked Questions
Q
What is the rate of TDS on sale of property?
A
The Finance Bill, 2013 introduced TDS on sale of property, whereby the purchaser of an immovable property, except rural agricultural land, should deduct TDS at the rate of 1% on the value of the property while making payment to the seller. However, the sale value of the property should be INR 50 Lakh or more.
Q
Who should deduct TDS on sale of property?
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The buyer of the property should deduct and deposit TDS with the Government, while making the payment to the seller.
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Is it compulsory for the buyer to possess TAN to report TDS on the purchase of a property?
A
No. A buyer can quote PAN in the absence of TAN, while making payment for TDS and filing the Form 26QB, in case of purchase of property.
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Is it necessary to have the PAN details of the seller?
A
Form 16B compulsorily requires the PAN details of the buyer and seller. Hence, it is essential to have PAN details of the seller.
Q
What is Form 26QB?
A
Form 26QB is a Return-Cum-Challan which is used by the deductor of the TDS while making payment at the time of purchase of property. After submission of Form 26QB, the deductor is enabled to generate Form 16B.
Q
What is Form 16B?
A
Form 16B is issued by the deductor or buyer to the seller of the property. Provided the value of property is INR 50 Lakh or more. Form 16B certifies the TDS is deducted by the buyer as per the applicable provisions of TDS.
Q
Whether the TDS should be deducted on the amount exceeding INR 50 Lakh or on the entire sale value of the property?
A
Under Section 194-IA, the TDS on sale of property is deducted at the rate of 1% on the entire value of property rather than only on the excess value over INR 50 Lakh. For instance, the sale value of property is INR 80 Lakh, TDS of 1% will be deducted on INR 80 Lakh and not the difference value of INR 30 Lakh.
Q
Can the TDS payment be made in cash?
A
The buyer may approach the authorized bank branch for facilitating e-payment of TDS.
Q
How are the joint parties transactions where there is more than one seller and buyer, filled in Form 26QB?
A
Form 26QB is a Return-Cum-Challan which should be filled by each buyer independent of each transaction. That is, a separate Form 26QB should be filled for a unique buyer-seller combination for each transaction.
Q
If the buyer has filled Form 26QB before making the payment for TDS and has opted for the option of e-payment at a later date, then how would the payment made at a later date be synced with the Form 26QB?
A
The e-payment of TDS at a later date will be synchronized with Form 26QB based on the acknowledgement number generated while filing Form 26QB.
Prachi Jain
Chartered Accountant
Prachi Jain is a Chartered Accountant with a passion for simplifying finance and tax-related matters through her insightful and informative blogs. With a background in finance and a deep understanding of tax regulations, Prachi has established herself as a trusted source of financial wisdom. Prachi is committed to empowering her readers with the knowledge they need to make informed financial decisions. Her expertise and dedication shine through in every blog post, helping her audience navigate the intricacies of finance and taxes with confidence. Follow Prachi Jain's blog for practical insights and guidance on managing your finances effectively.
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