Whenever a buyer purchases an immovable property (other than agricultural land) worth more than ₹50 lakh, they are required to deduct TDS under Section 194-IA of the Income Tax Act. The buyer must deposit this TDS with the government and file Form 26QB. Chartered Accountants are often consulted by both buyers and sellers to ensure the transaction is compliant, since errors in filing Form 26QB may lead to penalties, interest, or difficulties in claiming TDS credit.

What is Form 26QB?

Form 26QB is a challan-cum-statement filed online for reporting TDS deducted on property transactions. Unlike other TDS returns, buyers don’t need to file a separate TDS return (Form 24Q/26Q); Form 26QB itself serves as both the payment challan and the return.

Applicability of Form 26QB

A CA must check:

• Buyer’s responsibility: The buyer (not the seller) deducts and deposits TDS.

• Threshold: Property value exceeds ₹50 lakh.

• TDS Rate: 1% of the total consideration (without surcharge/cess).

• Multiple Buyers/Sellers: Each buyer-seller combination requires a separate Form 26QB.

Due Date for Filing Form 26QB

• Form 26QB must be filed within 30 days from the end of the month in which TDS was deducted.

• Example: If a sale deed is executed on 15th June, Form 26QB must be filed by 30th July.

Step-by-Step Process for Filing Form 26QB Online

1. Login to TIN/NSDL portal (or use the income tax e-filing portal).

2. Select ‘TDS on Property (Form 26QB)’ option.

3. Enter details:

   • PAN of buyer and seller

   • Complete property details

   • Date and value of transaction

   • TDS amount deducted

4. Choose payment method: Net banking/NEFT or challan for bank payment.

5. After successful payment, download Form 26QB acknowledgment.

6. Provide Form 16B (TDS certificate) to the seller within 15 days of filing.

Role of Chartered Accountants

• Verification of PANs of both parties (to avoid mismatch).

• Calculation check: Ensure TDS is correctly computed on total consideration.

• Compliance tracking: Monitor 30-day filing timeline.

• Assist in Form 16B issuance to sellers.

• Rectification: File correction requests in case of errors (wrong PAN, amount, etc.).

Penalties & Consequences of Non-Compliance

• Interest:

  • 1% per month for late deduction.

  • 1.5% per month for late deposit.

• Penalty under Section 234E: ₹200 per day for late filing.

• Prosecution/Penalty under Section 271H for incorrect details.

Practical Issues CAs Should Watch For

• Property purchased jointly by multiple buyers—ensure each files Form 26QB separately.

• Payment installments—TDS must be deducted and reported at each payment stage.

• Seller is an NRI—Section 194-IA does not apply; Section 195 TDS rules apply instead.

• Client confusion about Form 26QB vs. Form 26AS credit—CAs must reconcile for smooth tax filing.

Conclusion

For high-value property transactions, Form 26QB filing is a non-negotiable compliance requirement. Chartered Accountants can add significant value by guiding buyers through correct deduction, timely deposit, accurate filing, and issuance of Form 16B to sellers. A small error in Form 26QB can block credit for the seller and trigger penalties for the buyer—making CA involvement critical.