Form 16B: TDS Certificate for Sale of Property

What is Form 16B?

Form 16B is a TDS certificate that is issued by the purchaser of an immovable property to the seller of the property under section 194IA. This certificate acts as proof of the tax deducted on the sales consideration. The deductor then deposits the deducted amount to the Income Tax Department. TDS is not deductible on immovable properties and agricultural land whose value is less than Rs.50 lakhs. The buyers of immovable property have to deduct TDS @1% of the sale value. It is deducted at the time of credit or payment.

Relationship of Form 26QB and Form 16B

When an individual pays TDS to the Government, he or she will get a challan or return under section 26QB. This is an electronically furnished document for tax deducted under section 194-IA. The Form 26QB should be filled correctly as there is no procedure to rectify mistakes once the form is filled completely. Once this form is filled, no changes can be made without contacting the income tax department directly. This form is important and further required to obtain Form 16B. There are a few norms that are to be followed for this form. They are -

• The form 26QB should be filed within a period of 30 days following the month of deduction. If in case the TDS is given in installments, Form 26QB should be furnished for each installment.
• Form 26QB is made for each buyer and seller combination. For example, if there is one buyer and three sellers, Form 26QB will be made for each seller and buyer, like seller one and buyer, seller two and buyer, and seller three and buyer separately. The same rule follows if the number of buyers increases.

Here’s a catch: Form 26QB is like a payment slip you submit to the government when depositing tax, while Form 16B is the receipt you get for that payment.

Who is Eligible for Form 16B?

You are eligible for Form 16B if you are the seller of an immovable property (excluding agricultural land) that meets the following criteria:

• The property is sold to a resident Indian.
• The sale consideration (total value of the property) is ₹5- lakh or more.

If these conditions are met, the buyer must deduct TDS @ 1% of the sale value at the time of payment or credit. After deducting this TDS, the buyer will then file Form 26QB and issue you Form 16B as a certificate for the deducted TDS.

Components of Form 16B

Form 16B, unlike Form 16 for salary income, has a simpler structure focusing on the TDS deducted from property sales. Here are the key components of Form 16B:

• Deductor and Deductee Information: This section includes details of both the buyer (deductor) and seller (deductee), as follows:
  • Names and addresses
  • Permanent Account Number (PAN)
• Assessment Year: This indicates the financial year for which the TDS applies.
• Payment Acknowledgement Number (TAN): This number is generated by the government when the buyer deposits the deducted TDS.
• Amount Paid/Credited: This specifies the total sale consideration of the property.
• Verification: This section might have a checkbox or a space for the seller's signature to acknowledge the details mentioned on the form.

How to Generate Form 16B From TRACES?

To generate Form 16B, you have to register with TRACES with various details. The details you have to submit while registering are your PAN details, details of tax deduction details of challan, or details of Form 26QB. Enter the verification code and then proceed. The activation link will be sent to you by email. To proceed further, follow the steps:

• If you have already registered, there is no need to register again. Use the same login details.
• Login with PAN and password.
• Select Form 16B for the buyer from the download tab.
• Furnish details such as assessment year, PAN of the seller, and acknowledgment number of Form 26QB.
• Form 16B will be available to you in the requested downloads section under the ‘Download’ category.
• Form 16 can be saved or printed as per your requirement.

Format of Form 16B

Below is the format of Form 16B as per the Income Tax Act

Due Date for Form 16B

The deductor is required to furnish Form 16B to the payee within 15 days from the due date of providing Form 26QB. After this, Form 16b can be generated and downloaded from TRACES by following a few simple steps.

How to Download Form 16B From TRACES Portal?

Follow the below steps to download Form 16B from the TRACES portal -

Form 16B Download Process

• Step 1. Log in to TRACES using your User ID, Password, PAN, and captcha. Ensure your User ID matches your PAN.
• Step 2. Navigate to the Downloads section and select Form 16B/16C.
• Step 3. Enter the required details:
  • Form Type: Select Form 26QB.
  • Assessment Year.
  • Acknowledgment Number.
  • PAN of the Landlord.
• Step 4. Confirm the details of the Authorized Person, which are automatically filled from your TRACES profile. Click 'Submit'.
• Step 5. Once submitted successfully, a Request Number will be generated.
• Step 6. Go to the 'Downloads' tab to access requested downloads.
• Step 7. Enter the Request Number or Request Date and click 'View Request'.
• Step 8. If the status is 'Available', proceed to download the Form 16B PDF file. If it shows 'Submitted', wait for 24 to 48 hours for the status to change to 'Available'.
• Step 9. Download the file by clicking the HTTP Download button.
• Step 10. The downloaded file will be in zip format. Use the Buyer's Date of Birth in DDMMYYYY format as the password to open it.

How to Deposit TDS Payment?

To make the deposition of Tax Deduction at source easy, the income tax department is providing facilities for online submission of the amount. The taxpayers can deposit their TDS amount online. Internet banking facilities are also available for various users. When the transaction is done online, a counterfoil will be displayed with CIN, bank details, and payment details which are proof of payment being made by the payer.

The process of offline submission of TDS is a little difficult. After getting Form 26QB, a challan can be printed, and the tax deducted at source can be deposited at any authorized bank by means of cheque or draft.

Can Form 26QB be Filed Without TAN?

Form 16B only requires the PAN of the deductor and deductee; therefore, Form 26QB can be filed without TAN.

The transactions can be done by furnishing a separate return challan Form 26QB to file a TDS return in this condition without TAN.

Note: You need to file Form 26QB within 30 days of the moth-end in which the TDS was deducted.

Difference Between Form 16, Form 16A, and Form 16B

Here’s the difference between Forms 16, 16A, and 16B -

If you have recently deducted TDS on any payment amount and filed the relevant forms, it is important to know that you also need to file an ITR and report the income from property sales under the ‘capital gains’ section. However, income tax return filing can be complicated and challenging, especially for laymen. If you need assistance with ITR filing, you can connect with our tax experts for online CA consultation. Utilize our online CA services for professional guidance, and hire a CA for tax filing to ensure accuracy. File your ITR with the help of our experienced eCAs and make the process seamless.