Form 16B – TDS Certificate for Sale of Property

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Form 16B – TDS Certificate for Sale of Property

Form 16B is a TDS Certificate which certifies the amount of tax deducted at source on a property purchase has been deposited by the buyer with the Income Tax department. Hence, Form 16B is used as a TDS certificate to record the TDS deducted on a sale of immovable property.

Section 194-IA TDS on Sale or Property

TDS on sale of immovable property is governed by Section 194-IA of the Income Tax Act. Section 194 mandates deduction of TDS by the buyer at the rate of 1% at the time of payment of consideration to the seller. TDS on immovable property is not required for agricultural property and transfer of immovable property where the sale consideration is less than Rs.50 lakhs. Section 194-IA is reproduced below for reference:

'194-IA. Payment on transfer of certain immovable property other than agricultural land.—(1) Any person, being a transferee, 
responsible for paying (other than the person referred to in section 194LA) to a resident transferor any sum 
by way of consideration for transfer of any immovable property (other than agricultural land), shall, 
at the time of credit of such sum to the account of the transferor or at the time of payment of such sum in cash or 
by issue of a cheque or draft or by any other mode, whichever is earlier, deduct an amount equal to one per cent of such sum 
as income-tax thereon.
(2) No deduction under sub-section (1) shall be made where the consideration for the transfer of immovable property is less than 
fifty lakh rupees.
(3) The provisions of section 203A shall not apply to a person required to deduct tax in accordance with 
the provisions of this section.
Explanation.— For the purposes of this section,—
(a) "agricultural land" means agricultural land in India, not being land situated in any area referred to in 
items (a) and (b) of sub-clause (iii) of clause (14) of section 2;
(b) "immovable property" means any land (other than agricultural land) or any building or part of a building.'.

Form 16B Generation

As provided above, at the time of payment of sale consideration, the buyer will have to deduct TDS at the rate of 10%. The amount of TDS deducted must be deposited in an authorised bank along with challan Form 26QB. Form 26QB can be filed and generated on the TIN-NSDL website as follows:

Generating Form 26QB

  1. Go to TIN NSDL website
  2. Under ‘TDS on sale of property’, click on “Online form for furnishing TDS on property (Form 26QB)” or click here
  3. Select the applicable challan as “TDS on Sale of Property”.
  4. Fill the completed form with the following details:
    1. PAN of the seller & buyer
    2. Communication details of seller & buyer
    3. Property details
    4. Amount paid/credited & tax deposit details
  5. Submit the duly filled form to proceed.
  6. Confirmation is provided along with an option to Print Form 26QB or to Submit to Bank.

Depositing TDS Payment

By selecting Print Form 26QB, a challan can be printed and the TDS can be deposited at an authorised bank by way of cheque or demand draft. In case the taxpayer selects, “Submit to the bank”, the taxpayer will be immediately directed to an online payment page with internet banking facilities.

On successful payment, a challan counterfoil will be displayed containing CIN, payment details and bank name through which e-payment has been made. This counterfoil is proof of payment​ being made.

Thereafter, the taxpayer can proceed to the TRACES portal ( after five days to download Form 16B.

Downloading Form 16B

Only a purchaser/buyer, who is registered on TRACES as tax-payer can download Form 16B, using unique acknowledgement number generated while filing of Form 26QB.

About 5 to 10 days after depositing the TDS payment, the taxpayer can log in to the TRACES portal for downloading Form 16B. To download Form 16B, select Form 16B under the Downloads menu and enter details of the property transaction including assessment year and the PAN of the seller. Click on ‘submit request’ and continue to download Form 16B.  ​​​​​

Form 16B will act as proof that TDS has been deducted and deposited for the property transaction. While form 16 shows the deduction of TDS from salary, Form 16A shows TDS inferred from all other types of payments, Form 16B shows TDS deducted from the property sale and Form 16C shows TDS deducted on rent.

Sample Form 16B

A sample Form 16B is provided below for reference:

Form 16B

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