What is Form 16B ?
Form 16B is a certificate issued by the buyer of an immovable property to the seller, confirming the deduction and deposit of Tax Deducted at Source (TDS) under Section 194-IA of the Income Tax Act, 1961. It serves as proof that the TDS amount deducted during the property transaction has been paid to the Income Tax Department.
Key Points About Form 16B:
Applicability:
It is required for transactions involving the sale of immovable property (excluding agricultural land) valued at ₹50 lakhs or more.
The buyer must deduct TDS at 1% of the transaction value and deposit it with the government.
If the seller doesn’t provide their PAN, the TDS rate increases to 20% under Section 206AA.
Role of Form 26QB:
Form 26QB is the return-cum-challan for depositing TDS. It must be filed electronically within 30 days from the end of the month in which the deduction was made.
Deadlines:
Form 26QB must be submitted within 30 days of the TDS deduction.
Form 16B should be issued to the seller within 15 days after filing Form 26QB.
Penalty:
Failure to issue Form 16B may result in a penalty of ₹100 per day of delay.
Eligibility to Receive Form 16B:
Seller: The seller of the property is eligible to receive Form 16B from the buyer.
Transaction Value: The property must be valued at ₹50 lakhs or more.
Residency: The seller must be a resident of India.
Who Issues Form 16B?
The buyer of the property (referred to as the deductor) is responsible for issuing Form 16B to the seller after depositing the TDS amount. The buyer can download the certificate from the TRACES portal and share it with the seller as proof of compliance.