Form 16B

Individuals with taxable income must submit an income tax return to disclose their earnings and tax obligations. But India's income tax regulations allow for the actual collection/deduction of tax at source (TDS/TCS). This provides a steady flow of tax money to the government while also keeping an eye out for tax evasion.
The payer is accountable for withholding tax (TDS/TCS) and paying it to the government's credit. Getting a Tax Deduction Account Number (TAN) is required for this tax deduction. Every quarter of a financial year, the deductor is also accountable for completing a Tax Deduction at Source (TDS) record that includes information on the deductees, the kind of payment made, the tax deducted, the rate at which it is removed, and other details. The TDS returns are submitted to make it easier for the income tax division to credit TDS to the proper deductees.
The deductor must also provide the deductee with a TDS certificate for the tax deducted and complete the relevant forms. One of the TDS certifications required by the Income-tax Act of 1961 to be provided by the Deductor to the Deductee in respect of TDS deposited to the Government is Form 16B. We have covered the following essential topics in this article's explanation of Form 16B provisions:

What is the 16B form?

Form 16B is often a TDS certificate given to a seller by a purchaser or deductor. It is beneficial for taxpayers to confirm the amount of tax withheld at source before buying a property.
The deductor deposits the specified tax amount with the Income Tax. Form 16B is, in essence, a certificate that lists the amount TDS deducted in the event of a property sale. Notably, TDS on the mobile property is subject to the rules of ITA Section 194-IA. TDS is not applied to moveable and agricultural assets whose selling price is less than Rs. 50 lakhs.
Buyers must deduct a TDS at a rate of 1% upon receiving payment under Section 194 of the ITA. The buyer must provide Form 16B income tax to the relevant seller once the tax sum has been deposited with the IT Department.
This document certifies the TDS applicable on the sale profits of the property, as opposed to Form 16, which is a TDS certificate for salary, and Form 16A, which is a TDS certificate for non-salary income. The TDS certificate may be downloaded from the web.

Who May Submit a Form 16B?

The standard criteria for Form 16B are as follows:

• A buyer is obligated to give a resident seller attention.
• Buyers must deduct TDS at 1% of the time of credit or payment.
• According to Section 206AA, a vendor without a PAN would be responsible for a 20% TDS charge.
• A structure or piece of land is considered immovable property.
• There is a selling consideration for properties worth more than Rs. 50 lakhs.
• There is no TDS applied on agricultural land.

Tax deduction types and those in charge of taking deductions

This section's provisions are:

• Immovable property is transferred (apart from instances of coercive acquisition).
• Immovable property is land, a building, or a portion of a building, but not agricultural land.
• The buyer is responsible for compensating the resident seller with such a transfer.
• Transfer is for an amount of at least Rs. 50 lakhs.
• At the time of credit or payment, the buyer must deduct tax at 1% of the consideration.
• If the vendor does not provide a PAN, Section 206AA requires TDS to be paid at 20%.

Characteristics of Section 194I TDS on Property Sale

Section 194IA of the Income Tax Act of 1961 has the following aspects.

• Before paying the sale, the buyer must subtract TDS. The whole selling consideration is subject to a 1% tax rate.
• If the selling consideration is less than Rs. 50 lakhs, no tax deduction is made.
• Tax must be subtracted from each instalment if payment is made in instalments.
• Club dues, parking fees, water and energy bills, maintenance fees, and other fees are all included when transferring immovable property. Tax must be subtracted at 1% from the total consideration.
• The individual deducting the tax is not subject to the obligation of acquiring a Tax deduction account number.
• The government must receive payment of the tax withheld at source within 30 days after the end of the month in which it was withheld.
• The buyer must provide the seller with the TDS certificate in form 16B after submitting the tax payment to the government. The TRACES website offers the same information.
• The term "immovable property" refers to both land and buildings (other than agricultural land)
• If the seller fails to provide the buyer with a PAN, tax is deducted at the source at a rate of 20%.

What makes up the Form 16B components?

Form 16B's fundamental components are as follows:

• Year of assessment
• Splitting up the money
• Addresses of the Deductor and the Deductee
• Fiscal deduction
• Serial number for a challan
• Payment confirmation number
• Reliefs provided by Section 89
• PAN of the deduced.
  

Before starting the Form 16B download, people should double-check this information. You should be aware that deductors are required to provide a payee with Form 16B within 15 days after delivering Form 26QB. These are some crucial facts taxpayers should consider about buying a house. For the most recent guidelines, it is advised to visit the official websites.

When is the Form 16 Issue Due Date?

India requires Form 16B TDS to be issued, and failure to do so results in a fine. For the same, a fine of Rs. 100/day is charged. It should be noted that the deductor must provide the relevant payee with this form within 15 days after the due date for the challan-cum statement in Form 26QB.

Making a TDS deposit

The tax money is submitted as a demand draft or a check once the challan has been produced. The taxpayer is instead led to the bank's official payment website if they want to pay via the bank. A challan counterfoil containing payment information, including CIN, bank name, and other data, is presented when the required amount has been successfully paid. This counterfoil, in particular, acts as payment documentation. Then, after five days, registered taxpayers visit the TRACES site and get Form 16B.

Forms 16B and 26QB

Form 26QB is a return cum challan that must be provided online for tax deducted by Section 194-IA. It is used to pay TDS to the government.

1. Expires on
Within 30 days after the end of the month in which the deduction is made, Form 26QB must be provided. For instance, if payment or credit is paid on April 16th, Form 26QB must be submitted by May 30th.

2. Instalments
When payment or credit is made in instalments, Form 26QB must also be provided since TDS is needed for each instalment.

3. Several parties to the transaction
For each buyer and seller combination, Form 26QB must be provided.

Example 1: If there is just one buyer, B1, and two sellers, S1 and S2, Form 26QB must be given individually for each combination of B1 and S1 and B1 and S2, resulting in the filing of two 26QB forms total.

Example 2: In Example 1 above, if Buyer B2 is also included, Form 26QB must be given individually for Buyer B1 and Seller S1, Buyer B1 and Seller S2, Buyer B2 and Seller S2, and Buyer B2 and Seller S2, totalling 4 26QB to be submitted.

How Do I Pay Tax Using Form 26QB?

The processes to pay the tax via challan 26QB are as follows:

Step 1: Visit https://www.tin-nsdl.com and log in. Click on e-payment: Pay Taxes Online under the "services" tab. The following new window will appear. The taxpayer may choose TDS on the property by clicking (Form 26QB)

Step 2: Once the taxpayer clicks "continue," step 2 is completed.

• If the taxpayer is a corporation payer, 0020 should be selected in the tax-relevant area, and 0021 should be chosen for a non-business payer.
• Other details, including residence status, the buyer's and seller's PANs, the property's full address, the amount of taxes due, etc.

Step 3: Once all necessary information has been supplied, there are two payment options: instant e-tax payment (using the net banking facility) and e-tax payment on a later date (Paying taxes electronically by going to any Bank branch). The taxpayer may choose one of the payment options and continue.

• The taxpayer may sign in to their net banking account and make an online payment if they choose the net banking option. The bank permits the taxpayer to print the Challan 280 after receiving the money.
• In the event of offline payment, an online acknowledgement with a specific receipt number is created. With the aid of this challan, the taxpayer may make a payment at any authorised bank.

What does the Income Tax Act of 1961's Form 26QB entail?

A return cum challan called Form 26QB is used to deposit the tax that must be paid to the government. This form is employed when the requirements of Section 194IA of the Income Tax Act of 1961 are applicable.
The Form 26QB must be submitted within 30 days after the end of the month in which the buyer deducted the tax. If the payments are paid in instalments, a Form 26QB must be submitted for each instalment.

What happens if the payer lacks TAN?

As was already indicated, for all deductors to be able to deduct TDS and pay it to the government, they must get TAN. Additionally, in any correspondence with the Income-tax (TDS) department, TAN must be used. It is necessary to pay TDS using Challan No. ITNS 281.
However, persons may be parties to the transfer of immovable property transactions in most situations and thus cannot utilise Challan No. ITNS 281 without TAN, and getting TAN for a single transaction is not practical.
Therefore, deductors covered by Section 194-IA have been given an exemption and can submit TDS returns without TANs. A unique Return cum Challan Form 26QB has also been made available to make it easier for deductors to file TDS returns for Section 194-IA purposes without TANs.

How may someone’s Form 16B be downloaded?

The actions that the taxpayer must take are as follows:

Step 1: A first-time user's initial step is registering on the Official TRACES website. The PAN and challan number should be used to record the person as a taxpayer. As seen below, the registration screen would appear:

Step 2: Following successful registration, the taxpayer will have access to Form 16B, which may be given to the vendor. Within seven days of receiving payment, the seller may review the tax subtracted from his Form 26AS. Details of Tax Deducted at Source on Sale of Immovable Property Under Section 194(IA) [For Buyer of Property] shall display the information.

Step 3: The taxpayer may log into TRACES and choose "Form-16B (for the buyer)" from the download menu as shown below to download form 16B:

Step 4: The taxpayer must enter information such as the seller's PAN and the acknowledgement number before clicking on the next.

Step 5: After inputting the necessary data, the department may receive a request.

Brief Facts About 16B

1. Payment of taxes

• Within a week after the month's end after the tax deduction.
• Deposit made using the Form 26QB Challan-cum-statement
• Electronic payments to the RBI, SBI, or another financial organisation.
• The director general of income tax specifies remittance forms, procedures, and standards.

2. Certificate for Source Tax Deducted

• The deductor will issue a TDS Certificate in Form No. 16B about a deduction made under Section 194-IA.
• Given within fifteen days of the tax deposit deadline.
• You must download the form from the income tax website.

3. Paying electronically

• TDS on Property Sale is a link on the NSDL website.
• PAN information for both the transferor and the transferee must be provided.
• It is required to include the transferor and transferee's complete addresses.
• The properties: ❖ Comprehensive address ❖ Value-based thinking ❖ Date of the contract. ❖ If a lump sum payment was made. ❖ Additionally, an instalment must be entered into the web form.

Deductors make electronic payments without online banking

• There will be an alternative where Section 194-IA transactions must be completed once-off, and the deductor has no net-banking capability.
• The deductor enters the data online and selects the option for e-tax payment at a later time.
• A slip is produced after the form has been submitted.
• To make a payment, one may provide the acknowledgement number at a bank branch.
• Before moving forward with an electronic payment, banks use the TIN website to get payment details according to the acknowledgement number.
  

Remember that the buyer must provide the seller with Form 16B after the money has been lodged with the Income Tax Department. This is evidence that the TDS was taken from the property and lodged with the government. The TDS certificate for salary deductions is Form 16, the TDS certificate for premises from all other forms of payments is Form 16, and the TDS certificate for deductions from the sale of real estate is Form 16B.
You may get Form 16B from the TRACES website. The buyer may download Form 16B after completing Form 26QB and paying the TDS deposit.

Conclusion

Everyone who earns money subject to the tax must pay taxes to the government. Additionally, the assessee must submit a tax return for income. The income tax legislation specifies the tax deduction at source to simplify taxes and prevent tax evasion at numerous points. The tax withheld at birth may be subtracted from the overall amount of tax due, leaving the taxpayer responsible for the remaining amount.
The deductor provides a TDS certificate for the deductee specified as Form 16B during the payment of tax deduction at source for the sale of the property to the government by such taxation policy. The buyer makes this payment and subtracts it from the seller's total income before providing it to him. A 1% tax deduction will be provided at the source on the wholesale consideration amount.