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Form 16B is a TDS certificate issued for tax deducted at source on the sale of the property. As per the Income Tax Act, in a sale of the property, the buyer has to calculate and deduct the TDS from the total sale value while making the payment and deposit it with the Income Tax Department. Then they have to issue the Form 16B to the property seller.
The tax deducted at source or TDS on the sale of an immovable property falls in Section 194 IA of the Income Tax Act, 1961. TDS, however, is applicable only when the consideration value is more than 50 lakhs. For agricultural property and property sale values below ₹50 lakhs, no TDS needs to be deducted by the property buyer while purchasing the property. According to Section 194 IA of the Income Tax Act, 1% TDS needs to be deducted by the property buyer while making the payment to the property seller.
Once the TDS amount is paid to the Income Tax Department, the buyer must issue Form 16B to the property seller. This acts as proof that TDS has been deducted and successfully paid to the IT department.
To avoid this confusion between Form 16, Form 16A and Form 16B, we have explained it in simple terms below:
Form 16B TDS can be easily downloaded from the TRACES (TDS Reconciliation and Analysis and Correction Enabling System) website. The buyer can download the form after making the TDS deposit and filling up the Form 26QB.
The deductor or the buyer of the property has to issue Form 16B to the seller or the deductee within 15 days after the due date of receiving Form 26QB. The due date of receiving Form 26QB is 30 days from the last day of the month of deduction.
The buyer can access information about the TDS deducted with the help of Form 26AS. Form 26AS is similar to a consolidated statement which reflects the total TDS deducted under the given PAN number. Thus, it will contain the details as reflected in Form 16, Form 16A and Form 16B.
Therefore, Section 194 IA applies to every including individual. But some individuals, who do not require tax audit as per Section 44AB, are exempted from tax deduction at source from every section of the Income Tax Act. Therefore, such individuals don’t need a TAN.
Usually, individual taxpayers are party to property transactions. And it is not particularly feasible for individuals to obtain a TAN number for such one-time property transactions. Hence, the Income Tax Department has provided the option of paying the TDS by filing the Form 26QB and then issuing the TDS certificate Form 16B income tax.
The Form 26QB can be found under the e-payment section of the TIN or Tax Information Network of the Income Tax Department. You can fill the form online, then pay the taxes with the help of the e-payment gateway, or you can submit the Form 26QB at an authorised bank.
The details that you need to mention in Form 26QB include:
After the TDS payment is made at the bank, the challan gets generated, which contains the details such as Challan number, bank name, the amount paid, payment date, etc.
So, this is everything you need to know about Form 16B. Essentially, the buyer has to issue the Form 16B to the seller, after deducting the TDS, while making the payment towards the bought property, and deposit the TDS amount with the Income Tax Department.
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