Tax Deducted at Source ( TDS) on Purchase of Property( 26QB )

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Form 26QB is a TDS certificate that is issued by the buyer to the seller when TDS has been deducted on the purchase of a property in India. Here is a point-wise explanation of TDS on purchase of property (26QB):

1. Applicability:

TDS is applicable on the purchase of immovable property in India if the value of the property is more than 50 lakhs.

3. Deduction of TDS:

TDS is to be deducted by
the buyer at the time of
making payment to the seller.

5. TDS Certificate:

The buyer must provide a TDS certificate in the form of Form 26QB to the seller after depositing the TDS with the government.

7. Exemption from TDS:

TDS is not applicable if the property is being purchased from a relative or if the purchase is made under a will or by way of inheritance.

2. Rate of TDS:

The rate of TDS on property purchase is 1% of the consideration paid or payable.

4. Deposit of TDS:

The TDS so deducted must be deposited with the government with 30 days from the end of the month in which the deduction is made.

6. PAN of Seller:

TDS can only be
deducted if the PAN of the seller is provided to
the buyer.

8. Consequences of non-compliance:

If TDS is not deducted or deposited within the specified time, the buyer may be liable to pay interest
and penalties.

Frequently Asked Question

Form 26QB should mention the PAN of the buyer and seller, date of payment, amount of payment, TDS rate, TDS amount, details of the property being purchased, and the Challan details of TDS deposit.

Form 26QB must be furnished to the seller by the buyer within 15 days of depositing the TDS with the government.

Yes, Form 26QB can be filed online through the NSDL e-Gov website.

Yes, Form 26QB is mandatory for TDS on property purchase as it acts as proof of TDS payment.

For non filing or late filing of Form 26QB, a late fee u/s 234E of the Income Tax Act is levied at Rs. 200 per day for each day of delay Further, Interest is payable @ 1% per month for the period from the date on which TDS is deductible to the date on which TDS is actually deducted Further, if TDS is deducted but not deposited, Interest @ 1.5% from the date on which TDS is deducted to the date of actual deposit of TDS Further, Assessing officer has powers to levy penalty u/s 271H.

When there are multiple buyers or sellers involved in the purchase of a property, Form 26QB must be filed as follows: Multiple buyers: Each buyer must deduct TDS on their respective share, issue separate Form 26QB, and deposit TDS with the government in their own names. Multiple sellers: TDS must be deducted on the entire purchase price, a single Form 26QB must be issued to all the sellers, and TDS must be deposited with the government in the name of the person from whom TDS has been deducted.

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Tax Deducted at Source ( TDS) on Purchase of Property( 26QB )