Form 26QB filing and Correction procedure (TDS on Property)

By | November 8, 2016
(Last Updated On: July 9, 2018)

Form 26QB

Summary of Form 26QB

As per Finance Bill of 2013, TDS is applicable on sale of immoveable property wherein the sale consideration of the property is equal or exceeds to 50,00,000 (Rupees Fifty Lakh). Sec 194 IA of the Income Tax Act, 1961 states that for all transactions with effect from June 1, 2013, Tax @ 1% should be deducted by the purchaser/buyer of the property at the time of making payment of sale consideration. Tax so deducted should be deposited to the Government Account through any of the authorized bank branches in Form 26QB . Refer 26QB -Challan cum Statement for TDS on Property Sale  .

FAQs on TDS on Sale of Propery

Refer TDS on property : FAQs

What is Form 16B

After filing 26QB , buyers has to Download form 16B From TRACES portal Click here and issue it to the seller of the property.  Read Procedure to generate Form 16B and Password to open Form 16B

What is the date of filing in case of 26QB?

  • w.e.f. 1-6-2016. Any sum deducted under section 194-IA shall be paid to the credit of the Central Government within a period of thirty days from the end of the month in which the deduction is made and shall be accompanied by a challan-cum-statement in Form No. 26QB.

I will be making the payment to the seller in installments for the property that I have purchased exceeding Rs 50Lakhs , for each payment ,do I have to file a separate 26QB or only with only I Form 26QB can I pay the entire TDS amount ?

  • If the payment is in installments than TDS should be deducted with each installment .
  • Filing of 26QB Statement-cum-Challan:
  • 1. 26QB Statement-cum-challan (along with payment of tax) can be filled under “Form 26QB” in “TDS on Sale of Property” on the payment portal of NSDL.
  • Form 26QB
  • Eg: Mr A purchased an immovable property of INR 75Lakh. He is liable to pay the amount in 3 installments of 25 Lakh each. TDS is to be calculated at 25 Lakhs for every Installment made .
  • 1st Installment:
  • Amount Paid Credited – INR25 Lakh
  • TDS to be deducted – INR25,000
  • 26QB will be filed and acknowledgement no (e.g. AC1234567)
  • In this case for each installment a separate 26QB will be filed for each installment and the acknowledgement number generated after each 26QB filing will be used for the payment. Please don’t use one acknowledgement number for all the payments .

How will transactions of joint parties (more than one buyer/seller) be filed in Form 26QB ?

  • Online statement cum Challan Form/ Form 26QB is to be filled in by each buyer for unique buyer-seller combination for respective share.1:-26QB.
    Example: In case of one buyer and two sellers, two 26QB (statement cum challan) forms have to be filled in and for two buyers and two sellers, four 26QB (statement cum challan) forms have to be filled in for respective property shares.2:-Form 16B Example: Ram and Shyam are the buyers /purchaser and Sohan and Mohan are the sellers. Ram will issue separate Form 16B to Sohan and Mohan each. Shyam will issue separate Form 16B to Sohan and Mohan each. So in this way four forms have to be filled in for respective property shares.

How the amount deducted as TDS on Immovable property will be reflected in 26AS?

  • Amount deducted will be reflected in Part A2 of 26AS of the seller and in Part F of 26AS of the buyer.

While filing form 26QB I quoted tax amount in “Other” or “Education Cess” column. How can I rectify?

  • TDS amount will be automatically updated by the department even if it is quoted in “Other” or “Education Cess “column .

What type of default may be generated after processing of Form 26QB?

Following Type of Defaults may be generated:-

  • Late Payment,
  • Late Deduction &
  • Late filing.

How to pay Form 26QB default generated by TDS CPC?

Payment of demand raised against TDS on sale of property has to be paid through the URL https://onlineservices.tin.egov-nsdl.com/etaxnew/tdsnontds.jsp and select Demand Payment.

26QB FAQ

How all Defaults are calculated?

Along with the demand notice, a Justification report is also sent by TDS-CPC. Justification Report consists of various defaults/errors identified by the Income Tax Department (ITD) while processing the form 26QB filed by buyer for a particular transaction on sale of property of a financial year. It provides detailed information about the defaults/errors that needs to be rectified by buyer

 Is there any procedure to Waive off the amount of demand received for late filing and interest on late payment?

  • NO, Demand for late filing and interest on late payment cannot be waived off.

Taxpayer has not deducted any TDS on property as he has already paid the booking amount of property to the seller still he wants to pay the TDS. Can he pay the TDS amount?

  • Buyer should deduct and pay the TDS on Property. If buyer has not deducted while making payment to seller, in such case buyer has to recover the TDS on property from seller and deposit the same with late filing fee, late deduction and late payment interest.

Is late filing and interest on late payment applicable on NRI buyer as well?

  • As per Finance Bill of 2013, TDS is applicable on sale of immoveable property in India wherein the sale consideration of the property is equal or exceeds or to 50,00,000 (Rupees Fifty Lakh). If any default occurs in payment of TDS amount, it shall be closed by buyer.

I am trying for payment of late filing fee U/s 234E for form 26QB through on line mode. There is No column mentioned as Late filing fee in the Challan. How can I proceed for making such payment?

Deductor can select “Other” option in the Challan for making the payment of Late filing fee u/s 234E if column for late filing is not available.

What are the various types of defaults that may get generated on 26QB processing?

  • Following are the types of Defaults that may get generated on 26QB processing:-1. Short Deduction:

Short deduction is computed when the rate at which TDS Deducted’ is less than 1%.

  • Short Deduction Computation u/s 200A
Sr. NoSection CodeAmount Paid / Credited as per 26QB (Rs.)TDS Deposited as per challan (s)(Rs.)Rate at which Deposited as per 26QB (%)TDS Rates as per Act(%)TDS Deductible(1% * Amount Paid/credited as per 26QB)(Rs.)Short Deduction (Rs.)(Col 7 – Col 4)
12345678
1194IA9252000.009252.000.10%1%92520.0083268.00
  • 2.(a)Late Payment Interest:

When deductor deposits the TDS after due date of challan deposit, it is a case of late payment and interest will be charged accordingly. Late payment interest will be charged @ 1.5% per month from the date of tax deduction to date of tax deposition.

  • Late Payment Interest Computation u/s 200A read with Sec 201(1A)
Sr. NoDate of Deduction as per 26QB(dd-mmm-yyyy)Due Date for TDS Deposit(dd-mmm-yyyy)Date of Deposit as Per OLTAS (Challan)(dd-mmm-yyyy)TDS amount consumed from challan(Rs.)Period of Delay in Months(Col 4 – Col 3)Interest on Late Payment U/S 201 (1A)(Rs.)(Col 5 * Col 6 *1.5%
1234567
128-Feb-147-Mar-1410-Mar-146620199

* Due date of TDS deposit will be by 7th of the next month of the month for which transaction is reported.

  • 3.(a) Late Deduction Interest:

When deductor does not deduct the TDS amount on the date of Payment/Credit,
then, Interest on Late deduction is computed i.e. if the date of deduction is after the date of payment credit, then the late dedution
interest is computed. Late deduction interest is charged @ 1% per month from date of transaction to date of tax deduction.

  • Late Deduction Interest Computation u/s 200A read with Sec 201(1A)
Sr. NoDate of Payment/credit as per 26QB(dd-mmm-yyyy)Due Date of Deduction (dd-mmm-yyyy)*Date of Deduction as Per 26QB(dd-mmm-yyyy)TDS Deductible(1% * Amount Paid/credited as per 26QB)(Rs.)Period of Delay in Months(Col 4 – Col 3)Interest on Late Deduction U/S 201 (1A)(Rs.)(Col 5* Col 6)*1.%
1234567
127-Feb-1427-Feb-1410-Mar-1466202132

* Due date of deduction will be date of payment/credit whichever is earlier.

  • 3.(b) Interest on Short Deduction

Short deduction interest is calculated @ 1% per month on Part of the month from the date on which tax was deductible to the date of the processing of statement. Please note that ‘interest on Short Deduction’ is provisional in nature. As you pay the short deduction default amount, the corresponding interest (i.e interest on short deduction) would be reversed and the “Interest on Late payment” or ” Interest on late deduction” shall be levied appropriately, as the case may apply.

  • Short Deduction Interest Computation u/s 200A read with Sec 201(1A)
Sr. NoShort Deduction (Rs.)(as per Col 8)Date of Payment/Credit as per 26QB(dd-mmm-yyyy)Order Passed Date as per intimation(dd-mmm-yyyy)Period of Delay in Months(Col 4 – Col 3)Interest due to short deduction (Rs.)(Col 2 * Col 5 * 1%)
123456
183268.007-May-1412-Feb-162218304.00
  • 4. Late Filing Fee:

As per section 234E, where a person fails to file the TDS/TCS statement within the due date prescribed in this regard, and then he shall be liable to pay, by way of fee, a sum of Rs.200 for each day during which the failure continues. Fee amount will not exceed TDS deductible as per 26QB filed.

  • Late filing fee Computation u/s 234E
Sr. NoDue Date of Filing of 26QB*(dd-mmm-yyyyDate of deposit of challan(dd-mmm-yyyy)Delay in Filing(No. of Days) (Col 3- Col 2))Fee per Day(Rs.)Total Fee(Rs.)(Col4 * Col5))Total TDS Deductible(1% * Amount Paid/credited as per 26QB)(Rs.)Fee Payable = Min(Col 6, Col 7)(Rs.)
12345678
17-Mar-1410-Mar-1432006006620600

* Due date of filing will be by 7th of the next month of the month for which transaction is reported.
Note:1) Interest is chargeable for every month or part of the month on the amount of such tax.
2) A month is considered to be a calendar month as per general clauses act

What is the detailed procedure for making online correction in 26QB form?

26QB Correction functionality has been enabled on Tax Payer login on https://www.tdscpc.gov.in -> 26QB -> Online Correction. Buyer of property can only submit request and file correction.   Please refer the checklist displayed before filing correction for details.

Default Summary and Justification Report will also be available in  26QB tab for Buyer’s login.

When there is any CPC generated demand in 26QB the same should be paid through demand payment link on TIN-NSDL only. View more to know the Procedure for Payment of TDS demand on sale of Property.
NOTE- This link is available on Quick links: TDS on sale of property –> procedure for payment of TDS demand on sale of property –>View more to know the Procedure for Payment of TDS demand on sale of Property —- this link will open up a word document.

For stepwise 26QB correction you are requested to refer E-Tutorial available on TRACES.

 

Please follow the following link: http://contents.tdscpc.gov.in/en/e-tutorial-taxpayer.html

Is there any approval required for online correction of 26QB statement? If yes, the details thereof?

If the buyer makes correction using Digital Signature Certificate (DSC), then there is no need of TDS assessing officer (AO)’s approval for making correction in any field of 26QB form. But, if the buyer doesn’t make correction using Digital Signature Certificate (DSC), then following fields in 26QB online correction require approval of their TAN assessing officer (AO) :

  1. PAN of Buyer Details
  2. PAN of Seller Details
  3. Amount Paid/Credited – Amount payable to the Transferor/Seller
  4. Date of Payment/Credit ((Date of Payment to the Transferor/Seller). Note that the buyer will have to change the Financial Year as well if the changed Date of Payment/Credit lies outside the earlier financial year.
  5. Date of Tax Deduction

If the buyer wants to change the PAN of buyer but doesn’t make correction using DSC, then after the successful submission of correction request, an approval request will be automatically sent simultaneously to both ,PAN of Seller and Updated PAN of Buyer and status will be shown as “Pending for PAN approval” in the inbox of buyer .After getting their approval ,an approval request will be automatically sent to the TDS assessing officer and status will be shown as “Pending for AO approval” in the inbox of the buyer. However, if the same request is made using DSC then AO approval will not be required and only approval from PAN of Seller and Updated PAN of Buyer will be required.

If the buyer wants to change the PAN of seller but doesn’t make correction using DSC, then after the successful submission of correction request, an approval request will be automatically sent to the PAN of previous Seller and status will be shown as “Pending for PAN approval” in the inbox of buyer .After getting the approval of previous seller ,an approval request will be automatically sent to the TDS assessing officer and status will be shown as “Pending for AO approval” in the inbox of the buyer. However,if the same request is made using DSC, then AO approval will not be required and only approval from PAN of previous Seller will be required.

NOTE: In all the cases where approval by AO is required, the deductor will be prompted to approach the TDS assessing officer with hard copy of the correction request. The deductor/buyer should carry his Identity Proof &PAN Card along with the documents related to Transfer of Property and the proofs of payment made, for verification at the end of Assessing officer.

Is the intimation letter and justification report sent by CPC-TDS password protected? If yes, what is the password to open the same?

Yes, the attached document containing the intimation letter and justification report sent by CPC-TDS is password protected. To open the PDF, enter the first four characters of your PAN in capital letters, followed by an underscore (_) and date of payment / credit in the format DDMMYYYY. For e.g., if your PAN is ABCD12345E and date of payment / Credit as regular statement is 30-Sep-2012, enter password as ‘ABCD_30092012’.

I have paid the demand amount for TDS on property by filing a new 26QB ,Is this the correct Procedure?

No, you don’t have to make the payment of demand /default raised against TDS on sale of property by filing 26QB .

Demand raised against TDS on property has to be paid by the following easy steps :

Go to TIN-NSDL website by using the URL https://onlineservices.tin.egov-nsdl.com/etaxnew/tdsnontds.jsp

-Select “Demand Payment” option.

Fill in the details under the headings ,”Demand Payment for TDS on Property”

Click on “Submit”

In case If you have already filled new 26QB for demand payment: You can reduce Amount paid /Credited to “Zero” by 26QB Online correction available at TRACES in Taxpayers Login. For the same amount you will get the amount credited in buyers 26 AS (Part A2 ) which can be claimed by filing ITR

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