What is Form 16B? - TDS Certificate for Sale of Property

Introduction

When buying a property in India, tax rules require the buyer to deduct TDS (Tax Deducted at Source) before paying the seller. This TDS amount must be deposited with the Income Tax Department. After depositing this tax, the buyer must issue a TDS certificate to the seller. This certificate is known as Form 16B. It serves as proof that TDS has been deducted and paid correctly. Understanding Form 16B is important for both property buyers and sellers to avoid penalties and disputes. Let us understand its meaning, components, and how to download it only.

What is Form 16B?

Form 16B is a TDS certificate issued by the buyer of a property to the seller. It shows the TDS deducted at 1% on the sale value of the property (as per Section 194-IA of the Income Tax Act).
This rule applies when:

• The property value is ₹50 lakh or more
• The buyer is an individual resident
• The seller is also a resident

Example:

If a house is sold for ₹60,00,000, the buyer must deduct:
TDS = 1% of ₹60,00,000 = ₹60,000

The buyer will pay:

• ₹59,40,000 to seller
• ₹60,000 to the government

After paying this TDS, the buyer must generate Form 16B through the TRACES portal and provide it to the seller.

Open Demat account -  Begin your investment journey now!

Components of Form 16B

Form 16B contains the following details:

• Buyer’s Name and PAN
• Seller’s Name and PAN
• Property Details (address, transaction amount)
• Amount of TDS deducted
• Challan details (Payment reference numbers)
• Date of deduction and payment
• Buyer and seller contact details
• Certificate number and TRACES authentication code

These details confirm that the seller can report the property sale and claim TDS credit.

When is the Due Date for Issuing Form 16B?

Form 16B must be issued within 15 days from the date of filing Form 26QB (the TDS return form for property transactions).

• The buyer must deduct the 1% TDS when they pay the seller (or credit the amount to the seller).
• The buyer must file this form (which is like a challan-cum-statement) and deposit the deducted tax with the government within 30 days from the end of the month in which the deduction was made
• The buyer must issue Form 16B to the seller within 15 days from the due date of filing Form 26QB.

Late action may lead to penalties and interest

How is Form 16B Generated?

Form 16B is generated only through the TRACES (TDS Reconciliation and Correction Enabling System) portal after the buyer files Form 26QB and pays the TDS.

Steps:

1. Deduct 1% TDS from the property value.
2. Pay TDS using Form 26QB.
3. Register or log in to the TRACES portal.
4. Request Form 16B.
5. Download it after processing.

Penalty for Non-Issuance of Form 16B

If the buyer fails to issue Form 16B, penalties apply:

• A penalty of ₹100 per day u/s 272A until Form 16B is issued.
• Interest may also apply for late payment of TDS.
• The seller may face difficulty in claiming TDS credit.

Form 26QB and Penalty

Form 26QB is the single most important form in this process for the buyer. It is the challan-cum-statement used by the buyer to report the transaction and deposit the 1% TDS to the government.

Key Points about Form 26QB:

• What it is: The form filed by the property buyer (deductor) to pay the TDS on property sale.
• Due Date: Must be filed within 30 days from the end of the month in which the TDS was deducted.

Penalties:

Delay Type

Penalty

Late filing

₹200 per day (u/s 234E)

Non-filing

Penalty up to ₹10,000 (u/s 271H)

Nature of Tax Deduction and Person Responsible

• The buyer must deduct and deposit TDS.
• The seller receives the remaining amount after deduction.
• No TAN is required to deduct TDS for property sale; only PAN is needed

Procedure to Generate and Download Form 16B from TRACES

Step

Action

Details

1.

Register on TRACES

The buyer (deductor) needs to register on the TRACES portal (tdscpc.gov.in) using their PAN.

2.

Log In

Log in to the TRACES portal using the PAN as the User ID.

3.

Go to Downloads

Click on the 'Downloads' tab on the menu bar.

4.

Select Form

Select the option 'Form 16B (For Buyer)'.

5.

Enter Details

Provide the necessary details: Assessment Year (e.g., A.Y. 2026-27 for FY 2025-26), the Acknowledgement Number of the filed Form 26QB, and the PAN of the Seller.

6.

Submit Request

After verifying the details, submit the request. A Request Number will be generated.

7.

Wait for Status

Go to the 'Requested Downloads' section under the 'Downloads' tab. The request status will change from 'Submitted' to 'Available' (this usually takes 24-48 hours).

8.

Download & Issue

Once the status is 'Available', download the Form 16B file (it will be a password-protected zip file). The buyer then takes a printout and issues it to the seller.

Can Form 26QB be Filed Without TAN?

Yes.
Unlike other TDS forms, Form 26QB does not require a TAN number. A
PAN of the buyer and seller is enough.

Difference Between Form 16, Form 16A, and Form 16B

Feature

Form 16

Form 16A

Form 16B

Purpose/Income Type

TDS on Salary

TDS on Non-Salary Income

TDS on Sale of Immovable Property

Issued By

Employer to Employee

Payer to Recipient (e.g., Bank, Tenant, Company)

Buyer to Seller

Transaction Value

Not applicable; depends on salary amount

Varies by income type (e.g., interest, rent, etc.)

Property value must be ₹50 Lakh or more

Who Needs a TAN?

Yes, the employer must have a TAN.

Yes, Deductor (Payer) must have TAN.

No, Buyer (Deductor) does not need TAN.

Time of Issue

Annually (by June 15th)

Quarterly (15 days after TDS return due date)

Within 15 days from the Form 26QB due date

Conclusion

Form 16B is an important document that proves that TDS was correctly deducted and paid during a property transaction. It protects both the buyer and seller from legal issues and ensures transparency with the Income Tax Department. Understanding its process makes property transactions simpler and trouble-free.