TDS 26QB - Details and Due Date

TDS 26QB - Details and Due Date

TDS 26QB refers to the Tax Deducted at Source (TDS) return for TDS on Sale of Property under Section 194-IA of the Income Tax Act. It is specifically used for reporting TDS deductions on the sale of immovable property (land or buildings) when the consideration exceeds ₹50 lakhs.

Key Details of TDS 26QB:

1. Applicability:
   • Section 194-IA mandates the buyer of property (other than agricultural land) to deduct TDS at the rate of 1% of the total sale consideration (for both residential and commercial properties) when the purchase value exceeds ₹50 lakhs.
   • TDS should be deducted when the buyer makes payment to the seller (whether the payment is made in full or in installments).
   • The buyer is responsible for deducting and depositing TDS to the government.
2. Who Must File TDS 26QB?
   • Buyers of property are required to file Form 26QB if they have deducted TDS on the payment made to the seller.
   • This return is for the deduction of TDS on the sale of immovable property as specified under Section 194-IA.
3. Key Information in TDS 26QB:
   • Seller's PAN: The buyer must enter the seller's PAN, as this will be used for reporting the TDS in the seller's account.
   • Buyer's PAN: The buyer’s PAN is also required to be mentioned.
   • Details of Property: Information such as the property’s address and the total sale amount paid must be provided.
   • TDS Deduction Details: The amount of TDS deducted (1% of the sale consideration) and the corresponding challan details must be mentioned.
4. Due Date for Filing TDS 26QB:
   • Due Date for Filing Form 26QB: The TDS return must be filed within 30 days from the end of the month in which the TDS was deducted.
     • For example, if TDS was deducted in January, the due date for filing the return is February 28 (or 29 in case of a leap year).
   • Payment of TDS: The TDS deducted must be paid to the government on the same day the return is filed. The payment can be made online through the NSDL website using the challan for TDS on property transactions.
5. Challan for Payment:
   • The TDS payment is made using Challan No. ITNS 281. This is the same challan used for various types of TDS payments but should be filled out with the correct details for TDS on property transactions.
   • The challan should reflect the correct account code (for Section 194-IA, it is 0021).
6. Penalty for Non-Compliance:
   • Late Filing Fee: If TDS 26QB is not filed on time, a penalty of ₹200 per day is applicable under Section 234E until the return is filed.
   • Interest on Late Payment: If the TDS amount is not deposited on time, interest is charged at 1.5% per month on the TDS amount due.
7. Important Points:
   • Seller's PAN: If the seller does not provide a PAN, the buyer must deduct TDS at the rate of 20% instead of 1%.
   • Form 16B: After filing TDS 26QB, the buyer must provide Form 16B to the seller. This form serves as proof of TDS deduction and deposit.
   • Online Filing: TDS 26QB must be filed online, and there is no provision for manual submission of this return.

Summary:

• Form TDS 26QB is filed by the buyer to report TDS deductions on the sale of property under Section 194-IA.
• TDS rate: 1% of the total sale consideration when the property value exceeds ₹50 lakhs.
• Due date: 30 days from the end of the month in which TDS was deducted.
• Penalty: ₹200 per day for late filing and 1.5% interest per month for late payment of TDS.

By ensuring timely and accurate filing of TDS 26QB, both the buyer and seller can avoid penalties and ensure compliance with the tax laws.