Form 16B – TDS Certificate for Property Sale

If you're buying a property worth more than ₹50 lakhs, Form 16B is an important document you must know about. It acts as proof that you've deducted the mandatory 1% TDS and submitted it to the government. This page will help you understand everything about Form 16B – its purpose, how to generate it, and why it's necessary in property purchases.

What is Form 16B?

Form 16B is a TDS (Tax Deducted at Source) certificate issued by a property buyer to the seller. It confirms that the buyer has deducted 1% TDS from the sale value of the property and deposited it with the Income Tax Department under Section 194-IA of the Income Tax Act.

This form is not related to salary or employment. It is specifically used for immovable property transactions such as flats, plots, or buildings where the sale consideration is more than ₹50 lakhs.

When is Form 16B Required?

You are required to issue Form 16B when:

• You purchase immovable property (excluding agricultural land).
• The property value exceeds ₹50 lakhs.
• You are the buyer of the property and are making the payment to the seller.
• You have deducted 1% TDS from the payment and deposited it via Form 26QB.

Example
If you purchase a flat for ₹70,00,000, you must deduct ₹70,000 (1%) as TDS before paying the seller. After depositing this TDS with the Income Tax Department, you can download Form 16B and give it to the seller as proof.

What Details are Mentioned in Form 16B?

Form 16B contains:

• Name and PAN of buyer and seller
• Complete details of the property transaction
• Date of payment and amount paid
• TDS amount deducted and deposited
• Challan and acknowledgement number of TDS payment (from Form 26QB)

This certificate acts as a record of tax compliance for both parties.

Why is Form 16B Important?

It serves as proof that the buyer has deducted and deposited TDS

Helps the seller claim credit of TDS while filing ITR

Ensures compliance with the Income Tax Act

Mandatory for transactions over ₹50 lakhs

Failing to deduct or deposit TDS can attract interest and penalties from the Income Tax Department, so Form 16B is crucial for both parties.

Eligibility for Form 16B

Form 16B is issued to individuals who sell immovable property (excluding agricultural land) under certain conditions. You are eligible for Form 16B if:

• The property buyer is a resident Indian.
• The sale amount is ₹50 lakh or more.

In such cases, it is mandatory for the buyer to deduct 1% TDS on the total sale value either at the time of making the payment or when the amount is credited. Once the deduction is made, the buyer must file Form 26QB and then issue Form 16B to you as proof of the TDS paid on your behalf.