Form 26QB – Complete CA Guide on TDS for Sale of Property under Section 194IA

Property transactions often come under scrutiny by the Income Tax Department, and one of the most overlooked compliance areas is TDS deduction under Section 194IA. Chartered Accountants play a crucial role in guiding buyers and sellers through this process, especially when filing Form 26QB — the challan-cum-statement used to pay and report TDS on property purchases.

What is Form 26QB?

Form 26QB is a challan-cum-statement that must be filed by the buyer of an immovable property when TDS is deducted under Section 194IA.

Key provisions under Section 194IA:

• Applicable if the property value exceeds ₹50 lakh.

• Buyer must deduct 1% TDS on the sale consideration.

• The TDS must be deposited with the government and reported using Form 26QB within 30 days from the end of the month in which TDS is deducted.

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Who Needs to File Form 26QB?

• Buyer of property – responsible for deduction and filing.

• Resident seller – Form 26QB applies only if seller is a resident. (For NRI sellers, Section 195 applies.)

• Joint buyers/sellers – Each buyer must file a separate Form 26QB for each seller.

Step-by-Step Process to File Form 26QB

As a CA, guiding clients correctly prevents penalties and notices.

1. Visit TIN NSDL Portal – Navigate to the e-payment section.

2. Select Form 26QB – Choose the option “TDS on Sale of Property (Form 26QB).”

3. Enter Transaction Details – PAN of buyer & seller, property details, consideration amount.

4. Calculate TDS – System auto-calculates 1% of sale value.

5. Payment – Pay via net banking (online) or generate challan for offline payment at authorized banks.

6. Acknowledgement – Acknowledgement number generated; download and save for records.

Form 16B – TDS Certificate to Seller

Once Form 26QB is filed:

• Buyer must issue Form 16B (TDS certificate) to the seller within 15 days of filing Form 26QB.

• Form 16B is downloadable from TRACES portal.

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Due Dates for Form 26QB

• TDS Payment & Filing: Within 30 days from the end of the month in which deduction is made.

• Form 16B Issuance: Within 15 days from due date of Form 26QB filing.

Late filing attracts:

• Interest @1% per month for late deduction.

• Interest @1.5% per month for late payment.

• Penalty up to ₹1,00,000 under Section 271H for non-filing.

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Documents Required for Filing

To file Form 26QB smoothly, CAs should keep ready:

• PAN of both buyer and seller.

• Property details (address, type).

• Agreement value and date of transaction.

• Bank details of buyer for payment.

Common Issues CAs Should Watch For

1. Incorrect PAN entries – leads to mismatches and demand notices.

2. Joint ownership – separate Form 26QB for each buyer-seller combination.

3. Mismatch with purchase deed – TDS must be on total consideration, not installment value.

4. Delayed filing – leads to mandatory interest and penalty notices.

Key Takeaways for CAs

• Always verify PANs before filing.

• File Form 26QB within timelines to avoid penalties.

• Educate clients that TDS applies even if property is purchased with a loan.

• Maintain acknowledgement copies for audit and litigation defense.