Form 16B is one of the TDS certificates related to the sale of property that acts as a statement for the TDS charged during the transaction. The taxpayer is also required to file an income tax return for the same. According to the Income Tax Act, TDS was introduced as a measure to ease the tax filing process while also tackling the problem of tax evasion.
All this makes Form 16B one of the most important documents for the returns filing process. In this blog, we will demystify Form 16B for the common taxpayer. We will take a look at how you can download Form 16B, use it for return filings, and about the contents of the form.
Table of Contents
What is Form 16B?
According to the Income Tax Act of 1961, Form 16B is a TDS certificate issued by a purchaser to a seller. It is an important document that helps the taxpayer verify the total TDS charged while purchasing a property. To put it simply, income tax Form 16B is a certificate that has all the details of TDS deducted in a property sale.
Please note that TDS for immovable property comes under Section 194-1A of the Income Tax Act. This means that there are no TDS charges for agricultural land and immovable properties less than Rs.50 lakh in value.
Section 194 of the Income Tax Act states that the buyer is obligated to deduct a TDS of 1% while receiving payment. The buyer is then required to issue Form 16 to the seller once the tax amount has been deposited with the income tax department.
Form 16 acts as a TDS certificate for salary, and Form 16A is a TDS certificate for income from other sources. Form 16B acts as a record for TDS applied on the sale proceeds of the property.
Components of Form 16B
The following are some of the components of Form 16B that will come in handy while filing income tax returns:
- PAN of the seller.
- Assessment year.
- Payment acknowledgement number.
- Detailed breakdown of the salary paid.
- Eligible deductions as stated under the Income Tax Act.
- Income tax reliefs as stated under Section 89 of the Income Tax Act.
Difference Between Form 16, Form 16A and Form 16B
The table given below mentions some of the noteworthy differences between these income tax forms:
|
Basis of Comparison |
Form 16 | Form 16A |
Form 16B |
|
Who is it issued by? |
The employer is responsible for issuing Form 16. | This TDS certificate is issued by financial institutions, tenants, etc. |
It is issued by the person buying the property to the seller. |
|
Who is it for? |
It is issued in favor of the employees. | It is issued for non-salaried professionals. |
It is issued to the seller by the buyer |
|
What’s the purpose? |
This form is issued to detail the TDS on income from salary. | This form is issued with regards to any source of income other than salary, like income from rent, interest on FD, securities, return on investments, etc. |
This form is issued in lieu of TDS on income earned from the sale of immovable property. |
|
Components of the form |
● Income proof ● Employer’s TAN and PAN ● Employee’s PAN ● Tax paid on behalf of employees ● Acknowledgement no. |
● Deductor’s TAN and PAN
● Payee’s PAN ● Tax amount paid ● The receipt number |
● PAN of the Seller ● Assessment year ● Form 26QB Acknowledgement number ● Salary breakup ● Deductions under Income Tax Act, reliefs under Section 89. |
|
Binding Law |
Section 203 of the Income Tax Act. | Section 203 of the Income Tax Act. |
Section 194 of the Income Tax Act. |
How to Generate Form 16B?
As discussed above, the buyer deducts a TDS charge of 10% during the time of sale of a property. In addition to this, the amount is deposited with an authorized financial institution by using Form 26QB.
So, you will have to follow mainly three processes to generate Form 16B, which is:
- Generate Form 26QB
- Deposit the TDS Amount
- Download Form 16B
Let’s start with how we can generate Form 26QB below.
I. Generating Form 26QB
This form can be easily generated on the TIN-NSDL website by following the steps given below:
Step 1: Visit the TIN-NSDL website.
Step 2: Click on ‘Online form for furnishing TDS on property (Form 26QB)’, under the ‘TDS on sale of property’ tab.
Step 3: Click on the challan for ‘TDS on Sale of Property’.
Step 4: Enter all the necessary PAN information of the seller and buyer, property details, tax amount details, and contact details.
Step 5: Submit the form after carefully filling it. Click on ‘Confirm’ when the confirmation message appears after this. Two buttons will be visible on the screen, namely, ‘Print Form 26QB’ and ‘Submit to the bank’, along with an acknowledgment number.
Step 6: Save the acknowledgment number for future reference, click on ‘Print Form 26QB’ and make the payment via your preferred mode.
Step 7: Upon successful payment, a challan will be displayed containing the payment details and CIN. This challan is proof of payment.
Now that you have issued Form 26QB and have the payment challan with you, let’s see how you can make the TDS payment.
II. Depositing TDS Amount
The TDS amount is deposited as a Demand Draft (DD), or a cheque after the challan has been printed. If the taxpayer chooses to pay at a bank, they are redirected to the official payment gateway of the bank.
Once the due payment has been made to the authorities, a message displaying the CIN, payment details, bank’s name, etc., will appear on the screen. After this, the taxpayer needs to visit the TRACES website after at least 5 days to download Form 16B.
III. How to Download Form 16B?
Given below is the procedure to generate and download your Form 16B on the TRACES website:
Step 1: Log in to the TRACES website using your PAN and password.
Step 2: Click on ‘Form 16B (For Buyer)’ under the ‘Downloads’ tab.
Step 3: Provide various details like Form 26QB acknowledgment number, PAN of the seller, and assessment year.
Step 4: You will now be able to view Form 16B under the downloads section.
Step 5: Take a printout of the same and keep it handy for future reference.
Due Date for Issuing Form 16B
Form 16B is a TDS certificate that is to be issued by the employer to the employees. The deductor is required to issue income tax Form 16B to the payee within 15 days of the due date of submitting Form 26QB and Form 16B. The income tax form 16B can be generated and downloaded from the TDS Reconciliation Analysis and Correction Enabling System (TRACES).
What is the Password to Open Form 16B?
Once you are done generating and downloading Form 16B from the TRACES website, you will require a password to access the file. The password for accessing this file is the assessee’s date of birth in the DD/MM/YY format. For instance, if the buyer’s date of birth is 27th May 1992, the password for Form 16B will be 27051992.
You May Also Read:
| Income Tax Top Blogs | Income Tax Related Blogs |
| Income Tax Slabs | TDS |
| Income Tax Return | Form 16 |
| Income Tax e-Filing | Gratuity |
| Income Tax Refund Status | HRA |
| Income Tax Refund | Tax Exemption |
| Online Tax Payment | Challan 280 |
| Income Tax Portal | Advance Tax |
Frequently Asked Questions (FAQs)
Is Form 16B mandatory for returns filing?
Yes, Form 16B is mandatory for filing income tax returns. There is a penalty associated with not issuing this form.
What is the penalty for not issuing Form 16B?
As discussed in the blog, Form 16B is required to be furnished at least 15 days before the due date of furnishing Form 26QB. The penalty for delay in the same is Rs. 100 per day for the duration of the delay.
What is stated under Section 194-IA of the Income Tax Act?
Section 194-IA of the Income Tax Act is regarding the matters related to the sale of a property.
What is the TDS rate for the sale of a property?
The TDS rate applicable for the sale of a property is 1%.
Can a seller file a return for the TDS paid by him?
Yes, the seller is eligible to file a tax return for the TDS paid by the buyer to apply for a deduction in the total taxable amount. The seller is required to submit Form 16B for the same purpose.
What is an immovable property as stated in the Income Tax Act?
Section 194-IA of the Income Tax Act defines properties like land, buildings, houses, etc., other than agricultural land as immovable property.
Who is liable to pay TDS for the sale of a property?
The buyer is responsible for deducting the TDS on the payment made to the seller before the dealing is complete. The deducted amount has to be deposited by the buyer to the income tax authorities.
