Under Section 194-IA of the Income Tax Act of 1961, the buyer of an immovable property issues a TDS certificate to the seller, known as Form 16B. This document verifies that the money that was withheld from the purchase of the property as Tax Deducted at Source (TDS) has been deposited with the Income Tax Department.
The following are important details regarding Form 16B:
- With the exception of agricultural land, it is utilized in transactions involving the sale of immovable property.
- TDS must be deposited with the government after being subtracted by the buyer at a rate of 1% of the consideration.
- According to Section 206AA, TDS is withheld at a rate of 20% if the vendor fails to produce a PAN.
- For tax deducted under Section 194-IA, Form 26QB, a return cum challan for the payment of TDS to the government, must be submitted electronically.
- Thirty days after the end of the month in which the deduction is made, Form 26QB must be furnished.
Who is qualified to obtain Form 16B?
The following criteria must be met in order to receive Form 16B:
- Seller of Immovable Property: The buyer may give Form 16B to the seller who sold the property.
- Transaction Value: At least Rs. 50 lakhs should be spent on the real estate transaction.
- Residential Status: The vendor must be an Indian resident.
What is the Form 16B filing deadline?
Within 30 days following the end of the month in which the TDS on the real estate transaction was withheld, the buyer is required to provide Form 26QB. Within 15 days following the deadline for submitting Form 26QB, the buyer is required to give the seller Form 16B.
Note: Form 16B TDS is required in India, and non-issuance may result in fines. The fine is Rs. 100 per day.
Form 16B is issued by whom?
Form 16B is given to the seller by the buyer of an immovable property.
If the property transaction value is Rs. 50 lakhs or more, the buyer, also known as the deductor, is in charge of deducting TDS at a rate of 1%.
The buyer can create and download Form 16B from the TRACES website after the TDS has been submitted, and then give it to the seller as a certificate of tax deduction and deposit.
How can I create and obtain Form16B?
On the TIN-NSDL website, do the following actions to create a form for TDS on the sale of real estate:
- Go to the website of TIN NSDL.
- Locate the part titled “TDS on sale of property.”
- Select the “TDS on property” option by clicking on the web form.
- Choose “TDS on the sale of the property.”
- Enter the necessary information, including the buyer’s and seller’s PAN, contact data, property details, amount paid, tax deposited, etc.
- Check the information and send in the form.
