Form 26QB: TDS Payment on Purchase/Sale of Property
Under the form 26QB, a purchaser of property worth more than Rs 50 lakh has to deduct TDS while paying to the seller and pay the deducted TDS to the government within a specific time limit. Under section 194-IA of the Income Tax Act 1961, the government is entitled to get TDS on the sale or purchase of property having a specified worth. This article will guide you through a complete understanding of form 26QB TDS return, when to file this and what details it contains along with penalties attached.
TDS on Property to be Deducted Under What Conditions?
- No TDS deduction needed to be reported in 26QB if the property is worth less than Rs 50 lakh
- TDS to be deducted at the rate of 1% from the sale value of the immovable property
- No TAN details required to collect and deduct TDS
- Buyer and seller have PAN
- If there are multiple partners involved in the sale and purchase of property, multiple 26QB forms are to be filled up
- If payment is made in installments, TDS is also to be deducted in installments on a pro-rata basis
- Post TDS payment, the buyer has to issue 16B, TDS certificate to the seller
- No TDS deductible if the property is deemed as agricultural land
Note- property could not be considered agricultural land if it comes under the jurisdiction of a cantonment or municipality jurisdiction with a population of more than 10,000. The land is situated within the given distance and has a population within the given limits
| Distance from the cantonment board or municipality | Population |
| Up to 2Kms | 10,000<population<1,00,000 |
| Up to 6Kms | 1,00,000<population<10,00,000 |
| Up to 8Kms | >10,00,000 |
Penalties & Interest on 26QB
Late filing of TDS attracts Rs 200 per each and a maximum of Rs 1 lakh can be imposed as a penalty on the buyers. If the buyer has not deducted the TDS amount at the time of the transaction, there is interest payable on the due amount at the rate of 1%.
If the TDS is deducted but not paid to the government, there is interest payable at the rate of 1%. The late fees can be equivalent to the TDS amount for the delayed days. To ensure that you comply with regulations and rules related to tax, reach out to the team of TaxDunia. We will do all the paperwork and connect with the authorities on your behalf so that you can save a lot of time.
