What is Form 26QB? Form 26QB is a challan-cum-statement that buyers must file when purchasing immovable property from a resident seller. It serves two purposes:
Challan – To deposit the TDS amount with the government Statement – To report details of the property transaction
This requirement was introduced under Section 194-IA of the Income Tax Act, 1961, effective from June 1, 2013.
Key Point: Form 26QB is NOT just a payment challan—it's a combined return that reports your property transaction to the Income Tax Department.
When is Form 26QB Required? You MUST File Form 26QB When:
Property value is ₹50 Lakhs or more Seller is a resident of India Property is immovable (land, building, flat, plot) Property is located in an urban area
You DON'T Need Form 26QB When:
Property value is less than ₹50 Lakhs Seller is a Non-Resident Indian (NRI) – Section 195 applies instead Property is rural agricultural land
Important Update (October 2024): If there are multiple buyers or sellers, TDS must be deducted if the total property value exceeds ₹50 Lakhs—even if each person's share is less than ₹50 Lakhs. Each buyer must file a separate Form 26QB for their share.
TDS Rate and Calculation Standard TDS Rate ScenarioTDS RateSeller has PAN1%Seller doesn't have PAN20% How to Calculate TDS Example: You're buying a flat for ₹90,00,000 (90 Lakhs) ParticularsAmountSale Consideration₹90,00,000TDS Rate1%TDS Amount₹90,000Amount Payable to Seller₹89,10,000
Critical Note: TDS is calculated on the entire property value, NOT just the amount exceeding ₹50 Lakhs. In this example, TDS is 1% of ₹90 Lakhs—not 1% of ₹40 Lakhs.
TDS on Higher Value TDS should be calculated on the higher of:
Sale Consideration (agreement value), OR Stamp Duty Value (as per registration)
Documents Required Before Filing Before you start filing Form 26QB, gather the following information: Buyer's Details
PAN Card Complete address with PIN code Mobile number and email ID Category (Individual/HUF/Company/Firm)
Seller's Details
PAN Card (mandatory—otherwise 20% TDS applies) Complete address Category (Individual/HUF/Company/Firm)
Property Details
Type of property (Land/Building/Flat) Complete property address Date of agreement/sale deed Total sale consideration Stamp duty value
Payment Details
Amount being paid Date of payment TDS amount (1% of payment) Net banking access for online payment
Step-by-Step Process to File Form 26QB Step 1: Login to Income Tax Portal Visit www.incometax.gov.in and log in using your PAN and password. If you don't have an account, register first. Step 2: Navigate to Form 26QB Go to e-File → e-Pay Tax → Select "26QB (TDS on Sale of Property)" under New Payment → Click "Proceed" Step 3: Fill Buyer Details (Page 1) Enter your details:
PAN (auto-filled) Category Complete address Contact details
Step 4: Fill Seller Details (Page 2) Enter seller's information:
Seller's PAN Category Complete address
Step 5: Fill Property & Payment Details (Page 3) Provide transaction details:
Property type and address Date of agreement Total sale consideration Current payment amount TDS amount (auto-calculated)
Step 6: Choose Payment Mode Select your preferred option:
Pay Now – Immediate payment via Net Banking/Debit Card Pay Later – Generate challan and pay within due date
Step 7: Complete Payment Select your bank and complete the payment. Upon success, a challan counterfoil with CIN (Challan Identification Number) will be generated. Step 8: Download Acknowledgement Save the acknowledgement receipt—you'll need the Acknowledgement Number for downloading Form 16B later.
Due Date for Filing Form 26QB Form 26QB must be filed within 30 days from the end of the month in which TDS was deducted. Example: Transaction DateMonth EndDue Date15th December 202431st December 202430th January 20255th March 202531st March 202530th April 2025
Penalties for Non-Compliance Failing to comply with Form 26QB requirements can result in significant penalties: DefaultPenaltySectionLate filing of Form 26QB₹200 per day (max: TDS amount)Section 234ENon-deduction of TDSInterest @ 1% per monthSection 201(1A)Late deposit of TDSInterest @ 1.5% per monthSection 201(1A)Failure to file within 1 year₹10,000 to ₹1,00,000Section 271H
Warning: The ₹200/day penalty continues until Form 26QB is filed, capped at the TDS amount. For a ₹90,000 TDS, this means a maximum penalty of ₹90,000!
Downloading Form 16B (TDS Certificate) After filing Form 26QB, you must provide Form 16B to the seller within 15 days. Here's how: Step 1: Wait for Processing Form 16B becomes available on TRACES portal 5-7 days after Form 26QB payment. Step 2: Register on TRACES Visit www.tdscpc.gov.in and register as "Taxpayer" using your PAN. Step 3: Request Form 16B Navigate to Downloads → Form 16B (For Buyer) → Enter:
Assessment Year Acknowledgement Number Seller's PAN
Click "Submit Request" Step 4: Download and Share Once processed, download Form 16B and provide it to the seller as proof of TDS payment.
TDS on Instalment Payments If you're paying in instalments (common for under-construction properties or home loans), remember:
Deduct TDS on each instalment separately File separate Form 26QB for each payment Cannot file a consolidated statement for multiple payments
Example: InstalmentAmountTDS @1%Form 26QB1st Payment₹30,00,000₹30,000File separately2nd Payment₹30,00,000₹30,000File separately3rd Payment₹30,00,000₹30,000File separately
Correcting Errors in Form 26QB Made a mistake? Here's what you can do: Corrections Possible Online (via TRACES):
Amount details Address details Date corrections Other minor details
Note: Online corrections require approval from the seller via Aadhaar or Net Banking OTP.
Cannot Correct Online:
Seller's PAN – Must contact the Assessing Officer (AO) for rectification
Frequently Asked Questions Q1: Do I need TAN to file Form 26QB? No. TAN (Tax Deduction Account Number) is NOT required. You only need the PAN of both buyer and seller. Q2: What if there are multiple buyers/sellers? Each buyer must file a separate Form 26QB for their respective share. The same applies to multiple sellers. Q3: How will the seller know TDS has been deposited? The TDS reflects in the seller's Form 26AS (Annual Tax Statement) under Part F. Additionally, you must provide Form 16B as proof. Q4: Is Form 26QB required for exactly ₹50 Lakhs? Yes. The threshold is "₹50 Lakhs or more," so exactly ₹50 Lakhs requires compliance. Q5: I'm taking a home loan—who deducts TDS? The buyer must deduct TDS, not the bank. Even if the loan is disbursed directly to the seller, you're responsible for TDS compliance. Q6: Is TDS applicable on agricultural land?
Rural agricultural land: NOT applicable Urban agricultural land: Applicable
The classification depends on population and distance from municipal limits. Q7: What if the seller doesn't have PAN? TDS rate increases to 20% instead of 1%. Always insist on collecting the seller's PAN before the transaction.
Quick Reference Links PortalWebsiteIncome Tax e-Filingwww.incometax.gov.inTRACES Portalwww.tdscpc.gov.inTIN-NSDL Portalwww.tin-nsdl.com
Conclusion Filing Form 26QB may seem daunting at first, but with proper preparation and understanding, it's a straightforward process. Remember these key takeaways:
Who: Buyer of property worth ₹50 Lakhs or more What: Deduct 1% TDS and file Form 26QB When: Within 30 days from month-end of payment How: Online through the Income Tax portal After: Download Form 16B from TRACES and give to seller
Timely compliance not only keeps you penalty-free but also ensures a smooth property transaction for both parties.
Need Professional Assistance? Navigating TDS compliance can be complex, especially for high-value transactions. Our team at Himanshu Majithiya & Co. can help you with:
Accurate TDS calculation Timely Form 26QB filing Form 16B generation Error corrections and rectifications
Contact us today for hassle-free compliance!