When you’re buying property, you need to deduct TDS (Tax Deducted at Source) from the seller’s payment and deposit it with the government. Usually, Form 26QB is used when the seller is an Indian resident. You’ll need to provide details like the seller’s PAN, communication info, property details, and payment mode (like net banking or debit card). After payment, you’ll get a counterfoil as proof. Then, you can create a username on the TRACES portal to generate Form 16B, which you’ll submit to the seller.
But, if the seller is an NRI, the process changes. You’ll need to apply for a TAN (Tax Deduction and Collection Account Number) and deposit the TDS using it. This process is long and might need professional help from a chartered accountant. After depositing TDS, you must file a TDS return, and after some days, download and share the TDS certificate with the NRI seller.
It’s common for buyers to mistakenly use Form 26QB for NRI sellers, but this is incorrect. The Income Tax Department doesn’t accept it. Instead, you should first apply for a TAN and then file the TDS return in the correct form. If you mistakenly deposit TDS using the wrong form, you’ll need to request a refund and file a fresh TDS return. Getting a refund for TDS is tough and requires multiple visits to the department.
Let’s break down the process for you:
For Indian Resident Sellers:
- Visit the e-filing portal: Go to the income tax e-filing portal.
- Choose ‘e-Pay tax’: Under ‘e-file’, click on ‘e-Pay tax’.
- Initiate ‘New Payment’: Click on ‘New Payment’.
- Select ’26 QB’: Proceed under ‘26 QB (TDS on Sale of Property)’.
- Fill the form: Enter seller and buyer details, property information, and tax details.
- Choose payment mode: Select your payment mode.
- Complete payment: Make the payment.
- Get counterfoil: After successful payment, you’ll get a counterfoil with payment details.
- Download Form 16B: Visit the TRACES portal after 5 days to download Form 16B.
For NRI Sellers:
- Apply for TAN: As the buyer, apply for a TAN (Tax Deduction and Collection Account Number).
- Deposit TDS: Once you receive the TAN, deposit the TDS using this number.
- File TDS return: File the TDS return.
- Download TDS certificate: After a few days, download and share the TDS certificate with the NRI seller.
Avoid Mistakes:
- Don’t use Form 26QB for NRI sellers. It’s incorrect and not accepted by the tax department.
- If TDS is mistakenly deposited using Form 26QB, you’ll need to request a refund and file a fresh TDS return, which can be challenging.
How to Download Form 16B:
- Register on TRACES portal: Use your PAN to register on the TRACES portal.
- Select Form 16B: Under “Downloads”, choose “Form 16B (For Buyer)”.
- Enter transaction details: Fill in details like Assessment Year, Acknowledgment Number, and PAN of Seller.
- Submit request: Click on “Submit Request”.
- Confirmation: Once submitted, you’ll see a success message with a request number.
- Download requested files: After a few days, go to “Requested Downloads” and find your request.
- Download Form 16B: Click on “HTTP download” to get your Form 16B.
Following these steps ensures you comply with tax regulations and complete property transactions smoothly, whether you’re dealing with resident or NRI sellers.
