To disclose their earnings and tax obligations, everyone with taxable income must file an income tax return. But in India, TDS/TCS (Tax Deducted at Source) is mandated under the country's income tax rules. Keeping an eye on tax evasion while ensuring a steady flow of income to the government is a win-win situation. Form 16B plays an inevitable role while filing TDS returns. It is a mandate to disclose all the aspects while filing these returns, and it is also advised to stick to the filing deadlines.
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B part of Form 16 includes salary break-up, total taxable income, information about deductions claimed, and tax amount deducted from the salary.
Form 16 A
Form 16's Part A contains information on the employer's PAN and TAN, as well as quarterly TDS deducted and deposited. This section of Form 16 can be generated and downloaded by an employer using the TRACES.
Form 16 B
Form 16's Annexure B is part of Form 16's main body of work. Details on salary and deduction breakups permitted by Chapter VI-A must be included in Part B, which is prepared by the employer and given to employees. Form B is related to salaried employees.
TDS Form No.16B
- Form 16B shows the amount of tax deducted by the buyer on property lodged with the Income Tax Department. The buyer must subtract TDS from the sales price when selling immovable property. The buyer is responsible for paying 1% of the total cost of the transaction. After that, you'll need to make a payment to the Department of Revenue.
- The buyer must issue form 16B to the seller after the buyer has deposited the money with the Income Tax Department. This is proof that the government received the TDS taken from the property. When it comes to tax deductions, several different forms can be used. Form 16 is a tax deducted from a salary certificate; Form 16A is a tax deducted from all other payments, and Form 16B is a tax deducted from the sale of an asset certificate.
- Taxpayers are responsible for withholding and remitting tax to the appropriate government agencies. A TAN is essential for this tax deduction.
- TDS returns must be filed by the deductor quarterly for the financial year, containing information about the deductees, the type of payment, the tax deducted, and the rate removed. As the TDS is filed, income tax authorities can add the TDS to the recipients.
- The deductor may fill a TDS to the deductee in addition to filing such returns. They must send Form 16B to the deductee to report TDS deposited to the government under the Income-tax Act, 1961.
- Form 26QB can be submitted online on the portal. It shows the provision under sec 194-IA that tax debited will be included in this. The Taxpayer Identification Number (TAN) must be referenced in all dealings with the TDS (Income Tax) department. From the Downloads menu, select 'Form 16B (For Buyer)'. For the entire fiscal year, it details all payments and TDS deductions. If an employee does not have any other sources of income, Form 16 B can help them file their ITR.
Form 16B For Salaried Personnel
Form 16's Part B summarises the total amount of tax deducted from an employee's wage and put into the government's bank account.
Form No. 16B has the following components:
- The total compensation received by an employee is displayed in this section. Salary is further broken down into other components, such as LTA, LTA encashment, HRA, Gratuity, and others.
- Section 10 of the IT Act, 1961, allows employees to claim exemptions for Conveyance, HRA, and Children's education. Form 16B includes lodging, medical care, and other related costs.
- A maximum of ₹1.5 lakh can be deducted from your salary. Tax-saving mutual funds, such as Section 80C/80CCC/80CCD, Public Provident Fund, pension plans, life insurance policies, and Sukanya Samriddhi Scheme, are just a few examples of investments covered by these sections. Sections 80D and 80E, as well as deductions under other departments, are included.
- It is the sum of the employee's total wage and any other income they have disclosed, such as money from a house or property. Employees must provide the employer with information about alternative sources of revenue during the investment evidence submission stage.
Deductions are subtracted from gross income to arrive at taxable income, which is taxable. This sum is used to determine a taxpayer's tax obligation.
Section 87 rebate, Section 89 relief, and Section 87 education cess and surcharges are also included. There is also a breakdown of the total amount of tax owing, the amount of tax deducted, and any remaining tax due or refund due.
The following are the provisions included in this section:
- Immovable property is transferred (apart from circumstances of coercive acquisition).
- Agricultural land is not included in the definition of immovable property.
- The buyer must pay the resident seller's consideration for any such transfer.
- A transfer ranges at least ₹50 lakhs in consideration.
- The buyer deducts 1% as tax when paying for it.
- Under Sec 206AA, TDS is deducted as 20% if you don’t reveal the PAN.
Forms 26QB and 16B
Submission of form 26QB is made online. Deductions must be reported on Form 26QB within 30 days of every month when they occur. As TDS is paid in each instalment, Form 26QB must be filled for deduction if credit is made in instalments.
Parties Involved in Transactions
There are several parties involved in this transaction of sale deed.
- Form 26QB must be provided for all combinations.
- There is a buyer and seller involved in this.
- Form 26QB can be filed for each combination of B1 and S1, and S2 in the example above shows the addition of another buyer resulting in a total of four 26QBs to be submitted.
What Will Happen if the Payer has no TAN?
Deductors must get TANs to debit TDS. TDS (Income Tax) department must reference the Taxpayer Identification Number (TAN). Challan No. – ITNS 281 must be used to pay TDS. However, persons involved in transferring immovable property thus cannot use Challan No. ITNS 281 without a TAN and getting a TAN for a one-off transaction is not practicable.
- Form 26AS - The seller's tax credit appears as Form 26AS seven days after TDS payment.
- Form 16B must be issued by the due date.
TRACES can be used to prepare Form 16B download for the payee within 15 days of the required date for supplying Form 26QB.
Downloading Form 16B from TRACES
Taxpayers with their PAN and other specifics of their tax deduction, their Challan details, or their Form 26QB can register here. Click 'Proceed' after entering the code. A link is emailed to help complete the registration process.
- If you've already created an account, sign in with your username and password 'PAN'.
- Select 'Form 16B inside the Download.
- The seller's PAN, Form 26QB assessment year, and Form 26QB acknowledgement number should be provided.
- The requested section of the download category has been updated to include Form 16B.
- It is now possible to print or save Form 16B.
Form 16B is a certificate showing the amount of tax deducted by the buyer on a property registered with the Income Tax Office. Form 16 entails Form A and Form B, which the return filing persons must complete within the due date. Indian income tax regulations require TDS/TCS (Tax Deducted at Source). There are various slabs on which tax is applicable as per defined rates by the Indian Government. An employee's total remuneration is shown here with LTA, LTA encashment, HRA, Gratuity, and other salary components subdivided. ₹1.5 lakh is the highest amount that can withhold from your salary.
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