Every person is liable to income tax if his total income exceeds the income tax threshold limit/slab as provided under the Income-tax Act, 1961. In order to curb the Tax evasions & to generate a steady source of income, the government has introduced Tax Deducted at Source Concept (TDS) by deducting the prescribed amount of tax at the time it is generated rather than at a later date.
The amount of tax deducted at source can be claimed as a credit at the time of filing of Income Tax returns.
To deduct Tds, the person requires a Tax Deduction or Collection Account Number, known as TAN. The responsibility of filing Tds returns is on the Deductor & he should provide Tds Certificate certifying that the amount of tax so deducted has been deposited with the government.
Form 16B is one of the TDS Certificate issued under section 203 of the Income-tax Act, 1961 for tax deducted at source on sale of the property.
Form 16B certificate is issued by the Deductor to the deductee certifying the tax amount deducted & deposited to the governments on sale of the property.
As per section-194IA Tax shall be deducted on Payment on transfer of certain immovable property other than agricultural land, If below conditions have been satisfied
- The transfer of property should be other than compulsory acquisition
- The property so transferred is not an agriculture land
- The transfer must be for consideration and such consideration should exceed Rs.50 Lakhs.
The Transferee shall deduct a tax at the rate of 1% on such consideration or sum.
w.e.f. 01.09.2019 such sum should include all payments in the nature of club membership fee, car parking fee, electricity and water facility fees, maintenance fee, advance fee or any other charges of similar nature, which are incidental to the transfer of immovable property.
If Transferor failed to Furnish PAN, Tds at the rate of 20% shall be deducted as per sec-206AA
Form 26QB & Form 16B
Form 26QB is a challan-cum-statement for TDS payments and may be filed online. As per Section, 194-IA tax shall be deposited to the credit of Central Government by remitting it electronically to RBI or SBI or to any authorized bank, within thirty days from the month of deduction.
In case of Payments made in Instalments, Tds & Form 26QB shall require to furnish for each installment.
Each and every Tds deduction requires Form 26QB, irrespective of whether the transaction is with a single party or with the combination of multiple parties.
Tan is mandatory for deducting TDS & depositing it with government, but in case of transfer of Immovable properties, Tan is not possible because obtaining tan for one transaction is not feasible. So, the government with the help of the return-cum Challan Form 26QB.
Within 7 days after the date of TDS deduction, the credit has to be displayed in Form 26AS of seller.
The due date for filing Form 16B
Deductor should file Form.16B within 15days from the due date of form 26QB.
Form 16B can be downloaded from the TRACES website by registering on the basis of PAN.
Process of Downloading Form 16B
After registering on the Traces website, go to downloads tab, select Form 16b, and enter the required details such as Assessment year, an Acknowledgement number of Form 26QB & Pan of the transferor. After successful submission of the above details, Form 16b will be downloaded.
Now the Downloaded Form 16B can be printed or saved.