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Form 16B – TDS Certificate for Sale of Property | Company Vakil

Form 16B is a TDS Certificate which approves the amount of tax reduced at initial stages during buying of property is put by the citizen with the Income Tax sector. To simply it , Form 16B is a TDS certificate for TDS Reduced on a property sale .

Section 194-IA TDS on Sale or Property

TDS on sale of immovable property is governed by Section 194-IA of the Income Tax Act. Section 194 mandates deduction of TDS by the buyer at the rate of 1% at the time of payment of consideration to the seller.TDS on immovable property is not required for agricultural property and transfer of immovable property where the sale consideration is less than Rs.50 lakhs. Section 194-IA is reproduced below for reference:

46.After section 194-I of the Income-tax Act, the following section shall be inserted with effect from the 1st day of June, 2013, namely:—

‘194-IA. Payment on transfer of certain immovable property other than agricultural land.—(1) Any person, being a transferee, responsible for paying (other than the person referred to in section 194LA) to a resident transferor any sum by way of consideration for transfer of any immovable property (other than agricultural land), shall, at the time of credit of such sum to the account of the transferor or at the time of payment of such sum in cash or by issue of a cheque or draft or by any other mode, whichever is earlier, deduct an amount equal to one per cent of such sum as income-tax thereon.

(2) No deduction under sub-section (1) shall be made where the consideration for the transfer of an immovable property is less than fifty lakh rupees.

(3) The provisions of section 203A shall not apply to a person required to deduct tax in accordance with the provisions of this section.

Explanation.— For the purposes of this section,—

(a)“agricultural land” means agricultural land in India, not being a land situate in any area referred to in items (a) and (b) of sub-clause (iii) of clause (14) of section 2;

(b)“immovable property” means any land (other than agricultural land) or any building or part of a building.’.

Form 16B Generation

As provided above, at the time of payment of sale consideration, the buyer will have to deduct TDS at the rate of 10%. The amount of TDS deducted must be deposited in an authorized bank along with challan Form 26QB. Form 26QB can be filed and generated on the TIN-NSDL website as follows:

Generating Form 26QB

Step 1 – Go to TIN NSDL website​

Step 2 – In ‘TDS on sale of property’, select on “Online form for furnishing TDS on property (Form 26QB)” or select here

Step 3 – Select the applicable challan as “TDS on Sale of Property”.

Step 4 – Give out the entire form with the following information:

  • Seller & buyer’s PAN
  • Communication information of seller & buyer
  • Property information
  • sum paid or credited & tax deposit information

step 5 – Give out the duly filled form to continue.

Affirmation is provided along with option to Print Form 26QB or to Submit to Bank.

Depositing TDS Money

By choosing Print Form 26QB, a challan can be printed and the TDS can be put at an approved bank by way of cheque or demand draft. In case the citizen selects, “Submit to the bank”, the citizen will be directed at once to an internet payment page with online banking facilities.

On successful payment a challan  shall be shown containing CIN, payment information and bank name via which e-payment has been made. This counterfoil is confirmation of payment​ being made.

Proceed to TRACES portal( www.tdscpc.gov.in) after 5 days to download Form 16B.

Downloading Form 16B

Only a citizen, who is registered on TRACES as tax-payer can download Form 16B, using unique approved number given while filing of Form 26QB.

About 4 to 10 days after putting the TDS payment, the citizen can login to the TRACES portal for downloading Form 16B. To get the Form 16B, click Form 16B under the Downloads menu and enter information of the property activities including assessment year and the PAN of the citizen. select on submit request and proceed to get Form 16B.  ​​​​​

Form 16B will be a proof that TDS has been reduced and put for the property transaction. While form 16 shows the reduction of TDS from wages, Form 16A shows TDS put from all modes of payments, Form 16B shows TDS reduction from the property sale and Form 16C shows TDS reduced on rent.

Sample form

Form-16B

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