How to fill Form 26QB: Pay TDS on Purchase/Sale of Property

How to Determine TDS on Sale of Property?

Buyers must deduct TDS at 1% of the total sale value when purchasing a property worth ₹50 lakh or more. They must calculate the TDS based on the agreed sale consideration, not the market value or circle rate.

Steps to Calculate TDS:

Formula: TDS = (Sale Consideration) × (1%)

1. Identify the total sale value mentioned in the agreement.
2. Apply the TDS rate of 1% to the total sale amount.
3. Deduct the TDS amount before making the payment to the seller.
4. Deposit the deducted TDS with the government using Form 26QB.

Example Calculation:

If the property price is ₹75 lakh, the TDS calculation will be: ₹75,00,000 × 1% = ₹75,000

The buyer must deduct ₹75,000 from the payment to the seller and deposit it with the government.

Important Points:

1. If the seller does not provide a valid PAN, the TDS rate increases to 20%.
2. If the property value is below ₹50 lakh, buyers do not need to deduct TDS.

Documents Required to File Form 26QB

Before understanding how to fill Form 26QB, buyers must keep the necessary documents ready to ensure a smooth filing process. Having the correct information helps complete the form quickly and prevents delays in processing.

Buyers must keep the following documents and details ready before filing Form 26QB:

1. Buyer & Seller Details

• PAN of both buyer and seller (mandatory)
• Full name, address, and contact details of both parties

2. Property Details

• Complete address of the property
• Type of property (residential, commercial, land, etc.)

3. Transaction Details

• Total sale value of the property
• TDS amount (1% of sale value)
• Payment mode (full or installment-based)
• Date of transaction

4. Bank Details for Payment

• If paying online: Net banking/Debit card details
• If paying offline: Details of the bank where the challan will be deposited

Buyers must ensure accuracy while entering these details to avoid errors and penalties.

How to Fill Form 26QB

Buyers must file Form 26QB online to report and deposit TDS on the purchase of property. The process involves entering property details, deducting 1% TDS, and making the payment. The government now allows buyers to file Form 26QB directly through the Income Tax e-Filing portal.

Below are steps for Form 26QB filing:

1. Visit the Income Tax e-Filing Portal

1. Go to the official Income Tax e-Filing portal.
2. Click on “Login” and enter your PAN, password, and captcha to sign in.
3. If you’re a new user, register using your PAN as the user ID.

2. Navigate to Form 26QB

1. After logging in, go to “e-File” → “e-Pay Tax”.
2. Click on “New Payment”, then select “TDS on Property (Form 26QB)”.
3. Choose “Proceed” under the relevant section.

3. Enter Buyer & Seller Details

1. Enter the PAN of both the buyer and seller.
2. Click “Validate” to confirm the PAN details.
3. Provide the full name, address, and contact details of both parties.

If you don’t have a PAN, here’s a guide on how to apply for PAN in India.

4. Enter Property & Transaction Details

1. Provide the full address of the property, including city, state, and pin code.
2. Enter the total sale value of the property.
3. Calculate and enter 1% TDS on the sale value.
4. Mention whether the payment is in installments or full payment.
5. Enter the date of transaction (agreement or payment date).

5. Choose Payment Mode and Pay TDS

The portal allows two payment options:

• Pay Online (Net Banking/Debit Card):

  • Select your bank and make the payment online.
  • Download the Challan 280 receipt after successful payment.

• Pay Later (e-Tax Challan):

  • Generate the challan and take it to an authorized bank to pay via cheque or demand draft.
  • The bank will update the payment, and you can later download the challan receipt.

How to Download Form 26QB (Challan 280 & Form 16B)

When you file Form 26QB, you don’t need to download Form 26QB itself after submission, as it is an online form used to pay TDS on property purchases. Instead, buyers must download two important documents: Challan 280 and Form 16B.

• Challan 280 – Proof of TDS payment.
• Form 16B – TDS certificate for the seller.

These documents serve as proof of TDS payment and deduction, ensuring compliance with tax regulations.

How to Download Challan 280

Challan 280 acts as a payment receipt for the TDS deducted on property transactions. Buyers must download it immediately after making the payment.

Steps to Download Challan 280:

1. Visit the Income Tax e-Filing Portal.
2. Log in using the buyer’s PAN and password.
3. Go to “e-File” → “e-Pay Tax” → “Payment History”.
4. Find the relevant Form 26QB transaction and click on “Download Challan”.
5. Save the challan for future reference.

If you paid through net banking, your bank might also provide a copy of the challan in transaction history.

How to Download Form 16B

Form 16B is a TDS certificate that buyers must provide to sellers as proof of TDS deduction. Buyers can download it from the TRACES portal after Form 26QB is processed.

Steps to Download Form 16B: 

1. Visit the TRACES portal.
2. Register/log in using the buyer’s PAN.
3. Go to “Downloads” → “Form 16B (for Buyer)”.
4. Enter the acknowledgement number of Form 26QB and verify details.
5. Submit the request and wait for processing (it may take a few days).

Once available, download Form 16B and provide it to the seller.

Due Date for Form 26QB Filing

Buyers must file Form 26QB and pay TDS within 30 days from the end of the month in which they make the property payment to the seller. Meeting this deadline prevents penalties and interest charges.

Understanding the Due Date Calculation:

• If the buyer makes the payment on April 15, they must file Form 26QB and deposit TDS by May 30.
• If the buyer pays in installments, they must deduct and deposit TDS separately for each payment within 30 days of the respective month.

Why Filing on Time is Important?

• Avoids late fees under Section 234E.
• Prevents interest penalties on delayed TDS payments.
• Ensures the seller gets Form 16B on time for tax filing. The seller can download Form 16B after 7-10 days of Form 26QB filing.

Filing Form 26QB on time helps buyers comply with TDS regulations and avoid legal issues.

Penalties for Late Filing of Form 26QB

Buyers must file Form 26QB and deposit TDS within 30 days of making the property payment. Failing to meet this deadline results in penalties and interest charges.

1. Late Fee Under Section 234E

• If buyers delay filing Form 26QB, they must pay a late fee of ₹200 per day until they file the form.
• However, the total late fee cannot exceed the TDS amount.

2. Interest on Late TDS Deposit

• If buyers fail to deduct TDS on time, they must pay 1% interest per month on the TDS amount from the date of payment to the seller until deduction.
• If buyers deduct TDS but fail to deposit it, they must pay 1.5% interest per month from the deduction date until the actual payment to the government.

3. Penalty Under Section 271H

• If buyers fail to file Form 26QB within one year, the Income Tax Department may impose a penalty between ₹10,000 and ₹1,00,000.

Here’s a table summarizing the penalties for late filing of Form 26QB:

Delay Type	Penalty/Interest	Maximum Limit
Late Filing Fee (Sec 234E)	₹200 per day	Cannot exceed the TDS amount
Interest for Late TDS Deduction	1% per month	No limit
Interest for Late TDS Deposit	1.5% per month	No limit
Penalty (Sec 271H)	₹10,000 to ₹1,00,000	Decided by the IT Department
Penalty for Incorrect PAN (Sec 272B)	₹10,000	₹10,000 per incorrect PAN

How to Correct Errors in Form 26QB?

Now you have learnt how to fill out Form 26QB, but what if you make any errors while filing the form? If buyers make mistakes while filing Form 26QB, they must correct them to avoid tax discrepancies. The Income Tax Department allows buyers to make corrections by submitting a request through the TRACES portal.

Steps to Correct Form 26QB

1. Visit the TRACES portal.
2. Log in using the buyer’s PAN.
3. Go to “Statements/Forms” → “Request for Correction”.
4. Select Form 26QB and enter the acknowledgement number.
5. Choose the details that need correction and submit the request.
6. Track the status under “Correction Status”.

If the request gets approved, the changes reflect in tax records.

Conclusion

Understanding how to fill Form 26QB correctly ensures smooth compliance with TDS regulations on property transactions. Buyers must deduct and deposit TDS within 30 days, verify PAN details, and download Challan 280 and Form 16B to avoid penalties. Timely filing and accurate details prevent unnecessary interest charges, legal complications, and delays in obtaining the TDS certificate.

At EasetoCompliance, we offer expert assistance in direct taxation services, including TDS filing, and compliance management. Our professionals help buyers navigate tax complexities, ensuring a smooth and error-free filing process. Contact us to get expert help today for a hassle-free experience.

FAQs on How to Fill Form 26QB

Q1. What is TDS on Sale of Property?

TDS (Tax Deducted at Source) on the sale of property is a tax that the buyer must deduct at 1% of the total sale value if the property price exceeds ₹50 lakh. The buyer must then deposit this TDS with the Income Tax Department and file Form 26QB as proof of deduction.

Q2. How can I check the status of my Form 26QB filing?

Buyers can check the status of Form 26QB by visiting the TRACES portal, logging in with their PAN, and navigating to the “View Form 26QB Status” section.

Q3. What is Form 16B?

Form 16B is a TDS certificate issued by the buyer to the seller as proof that TDS has been deducted and deposited with the government. After filing Form 26QB, the buyer must download Form 16B from the TRACES portal and provide it to the seller.