TDS on Purchase of Property from RI
Deliverables - Timeline
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Deliverables
Acknowledgement Receipt of TDS
Compliance Documents
Copy of challan if any payment is made
Timeline
5 Days
(from receipt of all documents)
What Is Form 26QB?
The Income Tax Act of 1961 has set specific rules for purchasing and selling immovable property. Under Section 194-IA of the income tax, a buyer should deduct TDS at 1% of the sum or the stamp duty value of such property, whichever is higher, only if the property value for transactions exceeds Rs.50 lakh.
ITR Filing Last Date 2025
The last date to file Income Tax Return (ITR) for FY 2024-25 (AY 2025-26) without a late fee is 31st July 2025.
For instance, if a buyer purchases a property for Rs.90 lakh, then the TDS deduction will be initiated on the property's value (i.e., 90 lakhs) and not on Rs.40 lakh (90-50).
26QB is an online statement cum challan form used for the payment of this TDS to the government. The buyer must fill out this form within a stipulated time for making a TDS payment on the sale of a property. This form requires all details of the property along with the details of buyers, sellers, tax deposits, and so on. It is available on the Income Tax website.
When Should Form 26QB Be Filed?
If you are a buyer, then you must file and submit Form 26QB within 30 days from the month’s end for which the tax was deducted. For a comprehensive understanding, let’s consider an example:
Suppose you buy a property from a friend, and the transaction was initiated on 15 December 2023. In this case, you must submit the TDS amount on or before 30 January 2024. If you fail to file the return within the stipulated due date, a late fee of Rs.200 per day will be imposed.
Penalty Charges Associated With Form 26QB
The table given below discusses the penalty charges and possible reasons related to Form 26QB:
|
SL No.
|
Reason for Penalty
|
Penalty Charges
|
|---|---|---|
|
1.
|
Delay in filing TDS
|
According to provisions of Section 234E, you have to pay a penalty charge of Rs.200 for each delayed day
|
|
2.
|
If the TDS is subtracted but not paid to the government
|
A penalty of 1.5% interest per month on the non-remittance of TDS to the government
|
|
3.
|
Non-deduction of TDS
|
A penalty of 1% interest on the amount not deducted for TDS
|
|
4.
|
If the required statement is not submitted within the stipulated time
|
As per Section 271H, you are liable to pay a penalty ranging from Rs.10,000 to Rs.1 lakh. However, no penalty charges will be applicable if you pay TDS along with fees, interest and the required statement within a specific time.
|
Final Word
Form 26QB is a challan cum return statement that is required to file for the deposit of TDS on the property. If you are a purchaser, filing this form within the stipulated date is imperative to avoid hefty penalty charges.
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FAQs
Ideally, each buyer needs to file the e-statement form or Form 26QB to get a unique buyer-seller combination for his/her respective share. For instance, if there are two buyers and two sellers, filing four forms for corresponding property shares is imperative. Similarly, if there is one buyer and two sellers, it is imperative to file two forms.
