Everything You Must Know About TDS Form 26QB Online

13 Mar,2023

NRIs or non-resident Indians with warnings abroad and even in India face several finance management problems. They also find it difficult to track different bank accounts while repatriating money to their home accounts. NRO and NRE accounts come to the rescue here. An NRI opens a bank account in India to manage their foreign earnings, which is an NRI account. 

What is Form 26QB? Understanding the Requirements, the Process to Fill In and Other Important Details

NRIs or non-resident Indians with warnings abroad and even in India face several finance management problems. They also find it difficult to track different bank accounts while repatriating money to their home accounts. NRO and NRE accounts come to the rescue here. An NRI opens a bank account in India to manage their foreign earnings, which is an NRI account. 

On the other hand, an NRO account is a bank account that an NRI opens in India to park earnings made in India. Such incomes include dividends, rent, interest and pension and must be initiated by filing Form 26QB. If an NRI books an apartment in India and pays money from a bank account, it is important for them to file Form 26QB online. TDS form 26QB can be filed separately.  

What is Form 26QB?

Form 26QB is a return-cum-challan form used for paying TDS or Tax Deducted at Source to the government for all deductions made under Section 194-IA of the Income Tax Act, 1961. This section handles transactions involving the sale of immovable property and applicable TDS. Submitting a duly filled-in TDS form 26QB within 30 days of transferring immovable property is important. Some of the most critical requirements to file form 26QB are as follows:

 - Seller and buyer address

- Seller and buyer PAN

- Property details

- Seller and buyer contact details

- Tax deposit information

- The amount credited or paid

Key Features of Form 26QB under Section 194-IA

The Income Tax Act 1961 lays out a few important rules about the sale and purchase of the immovable property. In these transactions covered under Section 194-IA, the property buyer, also called Deductor, needs to deduct TDS if the value of the transaction is above Rs. 50 lakhs. Next, the buyer must also issue form 16B to the seller. Essential requirements to file form 26QB, as listed under Section 194-IA of the Income Tax Act, 1961, are as follows:

- When completing the transaction, the buyer should deduct TDA at 1% interest of the total sale amount.

- The buyer doesn't need to deduct TDS on immovable properties valued at less than Rs. 50 lakhs. TDS is generally deducted from the entire transaction amount for transactions below this limit.

- TDS u/s 194-IA does not apply to transactions that involve agricultural land.

- TDS is deducted proportionately on each instalment if the payment is made in instalments.

- The property buyer doesn't need to get a TAN or Tax Deduction Account Number for deducting and depositing TDS. Nevertheless, PAN is crucial for the property buyer and seller if a TDS deduction occurs using form 26QB.

- The property buyer should present a TDS certificate to the seller after deducting and depositing TDS. This should be done within 15 days of the transaction in lieu of the tax deducted and deposited to the government.

- Lastly, the property buyer should get form 16B and present the same to the seller.

Penalties Related to Section 194-IA Form 26QB

Failure to deduct TDS, issue form 16B, or file form 26QB under Section 194 IA of the Income Tax Act may attract penalties and interests. These include:

- A penalty of 1% interest will be levied on the amount not deducted for TDS in case of non-deduction of TDA on the part of the property buyer.

- A monthly penalty of 1.5% of the deducted amount will be levied on non-remittance of TDS to the government.

- In case of a delay in filing TDS returns, a penalty of Rs. 200 per day for each day of default shall be levied.

How to Fill Form 26QB Online?

The process of filling out form 26QB online is very easy. Just go for form 26QB, download and start filling in the form. The steps for the 26QB form download and filling in are as follows:

- Get to https://www.tin-nsdl.com/.

- Next, click on Services- epayment: Pay Tax Online.

- Go to Proceed in the TDS on Property section and start filling in form 26QB by providing all relevant details. Ensure you have all details, like PAN details of seller and buyer; communication details of seller and buyer; property details; tax deposit details and details of the amount credited or paid.

- Submit the form, and you will get a confirmation screen. You will also get two options on the screen. They are Print Form 26QB and Submit to the Bank. You will also get an exclusive acknowledgement number to note down.

- Now click on the option that says Print Form 26QB and then click on Submit to the Bank.

- The next step is to make the payment through internet banking, and once you complete the payment, you will get a challan with payment details, bank name and CIN. This challan is proof of your payment. 

Payment through Challan 26QB (Online and Offline)

You can make form 26QB payment either online or offline. The steps you need to follow for form 26QB online payment include the following:

- Get to onlineservices.tin.egov-nsdl.com/etaxnew/tdsnontds.jsp

- Now click on Form 26QB.

- Choose 0020 if you are a corporate taxpayer; otherwise, click 0021.

- Fill in all the empty blanks and then click on Proceed.

FAQs

What is the use of 26QB?
The main purpose of form 26QB is to pay the TDS or Tax Deduction at Source to the government for all deductions made under Section 194-IA of the Income Tax Act, 1961.

How to generate a 26QB form?
Form 26QB must be generated at TRACES or TDS Reconciliation Analysis and Correction Enabling System. It is an online platform for managing and implementing TCS and TDS. The steps include:

- Logging into TRACES by providing user ID, password, PAN and specified captcha.

- Getting to the justification report download where you get form 26QB.

- Entering required details along with CIN details.

- Next, you will get a success message

- Now navigate to the requested downloads and provide the requested date or number

- The last step is to download the file and open it using the password "PAN of the Buyer" in capital letters.

Who needs to file 26QB?
Property buyers should file form 26QB for every exclusive buyer-seller combination for their respective shares. Fill two forms if there are two sellers and a single buyer. Alternatively, four forms should be filled in if there are two sellers and two buyers. 

What happens if TDS is not deducted on the purchase of property?
If TDS is not deducted on property purchase, an interest of 1% is levied for every part of the month or every month from the date on which the TDS was deductible till the date on which the TDS was deducted. This penalty can range to Rs. 1 Lakh under Section 271H. You can avoid this penalty by paying the TDS, the late payment fee, and the interest amount as soon as you get a tax notice.

Who will claim TDS on the sale of a property?
While the buyer needs to deduct TDS on the property and deposit it to the government during the property sale, the seller avails credit of the same or claims TDS on the sale of the property.

What is the stamp duty value for the property in form 26qb?
Section 194-IA of the Income Tax Act, 1961, read with Rules 30, 31, and 31A of Income Tax Rules, states that the stamp duty value of 1% shall be deducted for all transactions made during property purchase at the time of making a sale payment consideration. 

Can we claim a TDS refund on the property purchase?
Yes, claiming a TDS refund on a property purchase is possible. The property seller has the right to do so, while the buyer needs to deduct TDS on the property and deposit the same with the government during the property sale.

Is 26QB refundable?
Yes, taxpayers can submit a refund request for form 26QB on TRACES if they meet criteria like:

- PAN of the taxpayer matches TAN Master and TRACES profile.

- Deductor has registered the DSC of the Authorised Person on TRACES.

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