Every Indian citizen who falls under a specific tax bracket due to his or her earnings is liable to file income tax returns annually. However, to form things simpler for employers and employees, the government has drafted IT laws that allow for a tax deduction or collection at the source. This practice is popularly referred to as TDS or TCS. having the ability to deduct tax at the source ensures the government a gentle source of income, and also helps in curbing tax evasion. To be eligible for TDS, every employee requires a tax deduction or Collection Account Number, known as TAN. the company or deductor is given the responsibility of filing the TDS returns and providing employees with a certificate showing they have paid the required tax. Form 16B is one such TDS certificate that’s handed out.
Role of Form 16B
Form 16B is a TDS certificate which the deductor issues as per laws provided within the Income-tax Act, 1961 with respect to sale or transfer of immovable property or asset. it’s issued for all types of immovable property including commercial and residential buildings, land and even a part of a building. the only type of land this type does not suits is agricultural land whose sale has stringent rules. The one that buys the property is liable to handle the value of the transfer. this type comes into play in transactions that exceed Rs 50 lakhs, and therefore the TDS is deducted at a 10th rate on the payment. However, if the vendor doesn’t have the specified documents like PAN, statement records and TAN, then TDS are going to be cut at a rate of 20%.