What is Form 16B in Income Tax– Eligibility, Download & Filling Process

Do you know Form 16B is essential to approve the tax amount reduced at the initial stages of purchasing a property? A deductor issues this TDS certificate to a seller.

If you are planning to purchase a property, finding out the specifications of the specific form becomes crucial.

Keep scrolling to find details on how to get Form 16B and variables linked with it.

What Is Form 16B?

Form 16B is a TDS certificate issued by a deductor under the Income-tax Act, 1961. This is a deduction against the purchase of a new property.

A purchaser needs to deduct the TDS amount during a property sale. This amount needs to be deposited with the Income Tax Department.

According to Section 194 of the ITA, purchasers can deduct 1% as TDS rate. Once this tax amount is submitted to the IT Department, buyers must issue Form 16B income tax to a seller.

However, TDS does not apply to immovable and agricultural properties whose sale value is lower than ₹50 lakh.

Now let’s understand who is eligible to file Form 16B.

Who Is Eligible for Form 16B?

The common parameters against Form 16B are -

A buyer will be responsible for paying consideration to a resident seller
Buyers are mandated to deduct TDS at 1% of at the time of credit or payment
A seller without PAN will be liable for a 20% TDS rate as per Section 206AA
Any land or building falls under immovable property
No TDS is applicable over agricultural land
There is a sale consideration on a property higher than ₹50 lakhs.

Now, let’s learn how to generate Form 16B and download it with simple steps.

How to Download Form 16B from TRACES?

The steps to download Form 16B online are -

Log in to the official TRACES website or sign up first if you are a new user.
Select “Form 16B (For Buyer)” under the “Download” section. Furnish PAN, assessment year and Form 26QB acknowledgement number to proceed.
Print Form 16B, available under “Requested Downloads”. Sign this form before giving it to a seller.

From this, you must be aware now that you need to submit Form 26QB first to get Form 16B. Therefore, let’s check the steps on how to fill Form 26QB and file it without hassle.

How to Fill up Form 26QB Prior to Filling up Form 16B?

You can only download Form 16B by entering the acknowledgement number of Form 26QB. Hence it would help if you filled the Form 26QB first.

You can find Form 26QB on the TIN or Tax Information Network of the Income Tax Department. Then, fill in the form and make tax payments via online banking. You can also submit the said form to an authorised bank.

The steps to fill and file Form 26QB online are as follows -

Visit the official TIN NSDL website. Select “Online Form for Furnishing TDS on the Property” from the “TDS on Sale of Property” tab.
Click on the applicable challan. Fill in the form with details like PAN of the seller and buyer, property details, the amount paid, tax deposit, etc. Enter “Submit”.
A confirmation screen will appear with options to submit to the bank and print Form 26QB.
Keep a note of the unique acknowledgement number and click on “Print Form 26QB”.
Make respective payments via net banking.

A challan with details on payment, CIN, and bank name will be generated.

Now let’s check the components or format of Form 16B for further details.

What Is the Format of Income Tax Form 16B?

The basic components of Form 16B include -

Assessment year
Break-up of the payment
Address of deductee and deductor
Tax deduction
Challan serial number
Payment acknowledgement number
Reliefs under section 89
PAN of deductee and deductor

Individuals should check these details thoroughly before proceeding with Form 16B download.

You should know that deductors are liable to issue Form 16B to a payee within 15 days of furnishing Form 26QB.

These are some essential details taxpayers planning to purchase a property must know. It is recommended to check the official websites for updated rules.

Frequently Asked Questions

✓ Is there a penalty for the late issuance of Form 16B?

Individuals need to pay a penalty of ₹100 per day for late issuance of Form 16B.

✓ Which law binds Form 16B?

Form 16B is applicable under Section 194 of the Income Tax Act.

Important articles about TDS

What is TDS?

TDS Calculation

TDS Rates

TDS Correction Process

What is Form 15H in Income Tax

What is Form 15G in Income Tax

What is Form 16B in Income Tax

How to Make TDS Payment

How to Check TDS Refund Status

How to Fill TDS Challan 281

Difference Between Form 15G and Form 15H

Difference Between Form 16 and Form 16A

TDS Return Form

Difference Between TDS and TCS

Switch to Digit Insurance

Disclaimer: This information is added only for informative purposes and collected from different sources across the Internet. Digit Insurance is not promoting or recommending anything here. Please verify the information before making any decisions.