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What is Form 16B?

Form 16B for tax deducted at source verifies the volume of tax deducted at source when making a property purchase. This amount is given by the buyer to the Income Tax department. In a nutshell, this is a TDS certificate for all TDS deducted upon a property sale.

TDS applicable on sale of immovable property is controlled by Section 194-IA of the Income Tax Act, 1961. TDS is not required on immovable property where the sale consideration is less than Rs. 50 lakhs and agricultural property. Section 194 mandates deduction of 1% TDS by the buyer at the time of payment of consideration to the seller.

After the amount has been deposited with the Income Tax Department, the buyer will have to issue Form 16B to the seller. This is a proof of the TDS being deducted on the property and that it is deposited with the government. Form 16 is TDS certificate for the TDS deducted from salary, Form 16A is TDS certificate for the TDS deducted from all other types of payments, and Form 16B is TDS certificate for the TDS being deducted on the sale of property.

Form 16B can be downloaded from TRACES website. After the buyer fills up form 26QB and makes the TDS deposit, she/he may download Form 16B.

Form 16b

Form 16B – TDS Certificate for Sale of Property

  • Every person who is liable to income tax is required to pay tax and file income tax return. However, income tax laws in India provide for collection/deduction of tax at source itself.

  • While ensuring a consistent flow of revenue to the authorities, it also serves as a tax evasion check.

  • This TDS already paid can easily be reduced from total tax liability, with only the remaining amount as payable.

  • Deducting tax at source and giving it to the Government is the payer’s responsibility.

  • For such tax deduction, obtaining a Tax deduction Account Number (TAN) is mandatory. Deductor also has the responsibility of filing Tax deduction at source (TDS) return providing particulars of deductees, payment made, tax deducted, rate at which it is deducted etc., which helps the IT department to deliver the credit of TDS to the deductees.

  • Besides filing such returns, the deductor has to furnish a TDS certificate to the deductee for this deduction.

  • Form 16B is one of the TDS certificates to be issued by the deductor under Income-tax Act, 1961 to the deductee in respect of tax deducted and deposited to Government.

Due Date for Issuance of Form 16B

Deductor has to furnish Form 16B to the payee within a period of 15 days post due date for getting Form 26QB, which is within 30 days from the end of the month in which deduction is made.

Form 16B can be procured from TRACES (TDS Reconciliation and Analysis and Correction Enabling System)

Procedure to Download Form16B from TRACES

  • File as taxpayer on TRACES. This will need PAN card details together with details pertaining to challan / details of Form 26QB.

  • Input the verification code and click on ‘Proceed’.

  • Activation link will be sent to email id through which account can be successfully created.

  • If already registered, login to TRACES here with username as ‘PAN’ and password.

  • Under downloads tab, select ‘Form 16B (For Buyer)

  • Furnish details such as assessment year, acknowledgment no. of the Form 26QB and PAN of the seller.

  • Form 16B will now be available on requested downloads section under Downloads category.

  • Form 16B can now be printed/saved.

QUICK FACTS ON 16B

Deposit of tax

  • Deposit within a week from month’s end when tax was deducted.

  • Deposit through Challan-cum-statement in Form 26QB

  • Electronic deposit towards RBI/SBI or any banking authority.

  • Director General of income-tax states formats, procedure and standards for remittance.

Certificate for Tax Deducted at Source

  • TDS Certificate in respect deduction under section 194-IA will be issued by deductor in Form No 16B

  • Given within 15 days from tax deposit’s due date.

  • The form has to be downloaded from the income tax portal.

Electronic Payment

  • NSDL website contains link – ‘TDS on property sale’.

  • It is compulsory to give PAN details of both transferor and transferee

  • Complete address of transferor and transferee is to be given

  • About Property:

  • Complete address.

  • Value consideration.

  • Date of agreement.

  • Whether payment made in lump sum.

  • Instalment is also to be provided in the online form.

Deductor’s Electronic Payment who do not have net-banking.

  • When Section 194-IA transactions are to be done one off and deductor has no net-banking facility, there will be an alternate.

  • The deductor feeds the information online and then opt for e-tax payment on later date option.

  • On finishing the form, a slip is generated.

  • One can go to a bank branch for payment and give the acknowledgment number.

  • Banks utilise TIN web site to get payment information as per the acknowledgement number before proceeding towards electronic payment.

Remember that once the amount has been deposited with the Income Tax Department, the buyer will have to issue Form 16B to the seller. This is a proof of the TDS being deducted on the property and that it is deposited with the government. Form 16 is TDS certificate for the TDS deducted from salary, Form 16A is TDS certificate for the TDS deducted from all other types of payments, and Form 16B is TDS certificate for the TDS being deducted on the sale of property.

Form 16B can be downloaded from TRACES website. After the buyer fills up form 26QB and makes the TDS deposit, she/he may download Form 16B.

Frequently Asked Questions

What is The Use of Form 16B?

Form 16B is a TDS Certificate verifying the TDS deducted on property and deposited with the Income Tax Department.

Remember that at the time of sale of immovable property, the buyer has to subtract TDS on Property @ 1% on the amount payable to the seller. TDS is not required on immovable property where the sale consideration is less than Rs. 50 lakhs and agricultural property.

How can I Get Form 16B?

  • Login to:

tdscpc.gov.in/app/tapreg1.xhtml

  • Register as new user and give basic details:

    • PAN

    • Date of Birth

    • Also needed are the Last, Middle and First Name for verifying details on tax deducted or tax paid.

  • Next:

    • On Validation of details, your account will be created.

    • The default user ID is your PAN. Later, you may set your own password.

    • After this, an e-mail is generated automatically that contains the activation link with a second code sent as SMS to your cell phone. After activation, the account can be used.

  • You may view 26AS statement and download Form 16B as an immovable property buyer. At a later stage, you may be able to get Form 16 or 16A on this portal.

  • Click on download

  • Click on request for Form 16B.

  • Validate details and submit your request.

    • After some time, the same shall be available under download menu. Click on download, click on available and download and save it your computer.
            Print, sign and deliver it to the seller.
      

What is Difference Between Form 16 Part A and Part B?

16A

  • 16A comes under the section 203 of the Income Tax Act,1961 for tax deducted at source from any incomes other than salary.

  • Form-16A is required for tax deducted at source for all incomes apart from salary.

  • In case of non-salaried employees and professional workers of organisation who get fees, the certificate denoting TDS details subtracted when making payments is Form 16A.

Part A includes:

  • Employer & employee

  • Name and address, PAN and TAN details, employment period

  • TDS details deducted & deposited with the government

Part B includes:

  • Details of salary paid

  • Other incomes

  • Deductions allowed

  • Tax payable etc.

16B

  • This is a tax deducted at source certificate for TDS deducted on a sale of property.

  • After the buyer has made TDS payment for the seller, a certificate will be made available.

  • The buyer can then download this certificate also known as Form 16B and give it to the seller as a proof of TDS submission.

What is The Password to Open Form 16B?

  • Form 16B will be made as a PDF file and password to open this file is date of birth of the buyer in dd/mm/yyyy format.

What is Form 16B and 26QB?

  • Form 26QB – Challan/Return for TDS related payment.

  • Form 16B is a TDS certificate issues by the buyer to the seller for TDS deducted.

What is Form 26QB?

  • A tax deducted at source at the time of each credit/ payment to the seller’s account.

  • This is put into the government’s account through challan (Form 26QB) within a month of the next 30 days.

  • Remember that when a buyer does not deduct the taxes or deposit them in the government account, she/he becomes a default assessee.

What is Form 16B?

  • This is a tax deducted at source certification made when there is property sale.

  • After the buyer has made payment of tax deducted at source, a certificate is made.

  • The buyer can then download this certificate also known as Form 16B and give it to the seller as a proof of TDS submission.

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