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* This form has to be filled up for declaration of TDS returns in detail by NRIs and foreigners
* This form is based on the payments of foreigners and NRIs other than salary.
* t is compulsory for non-Government deductors to mention the PAN in the form.
* For Government deductors, "PANNOTREQD" has to be mentioned.
* The deductor category needs to be indicated based on the Annexure 1.
* If the deductors are Central Government, the Ministry/Department has to be mentioned. The same goes for the State Government.
* It is mandatory to fill in all the amount columns. If an amount is not applicable, 0.00 has to be mentioned.
* This is a quarterly tax deduction statement under the subsection (3), Section 200 of the Income tax Act, 1961.
Under Section 195, there are two parties involved in a TDS payment:
* Payer: The payer is an individual, organization, HUF, etc. who makes the payment to the NRI and is responsible for deducting TDS before transferring the amount to the Non-Resident Indian.
* Payee: The payee is the individual who receives the income. The residential status of the payee should be according to Section 6 of the I.T Act.
TDS returns under form 27Q does not include payments like dividend paid to NRI, salary and interest income as mentioned under sections 195LB/LC/LD.
TDS is deducted on the entire amount being paid. The final amount is increased because of the addition of education cess and surcharge. The rates at which TDS is levied corresponding to the reason for payment are as follows:
| Section | Payment Type | Rate of TDS |
|---|---|---|
| 194E | Payment made to Sports association or an NRI sportsman | 20% |
| 194LB | Payment made as to interest on the infrastructure debt fund | 5% |
| 194LC | Payment made as to interest by any Indian company or trust for the money borrowed in foreign currency as a loan or long-term bonds | 5% |
| 195 | Payment made on the investment made by a non-resident Indian citizen | 20% |
| Payment made to non-resident Indian citizen for investments on assets other than mentioned among the specified assets in the form of long-term capital | 10% | |
| Payment made to non-resident Indian citizen for investments on assets other than mentioned among the specified assets in the form of long-term capital | 10% | |
| Payment made to non-resident Indian citizen for unlisted shares and securities of a non-public company | 10% | |
| Payment made to non-resident Indian citizen which forms their income through long-term capital gains as mentioned under section 112A | 10% | |
| Payment made to non-resident Indian citizen which forms their income through short-term capital gains as mentioned under section 111A | 15% | |
| Any other payment made to non-resident Indian citizen which forms a part of their income as long-term capital gains. | 20% | |
| Payment made in the form of interest by the government of India or an Indian company on the amount borrowed as loan or debt | 20% | |
| Royalty paid to the non-resident Indian citizen by the Indian government or Indian company for the transfer of copyright or other such agreement. | 10% | |
| Fees paid for availing technical services by the Indian Government or Indian company | 10% | |
| Any other form of payment | 30% | |
| 196B | Payment made to an offshore fund | 10% |
| 196C | Payment to non-resident Indian citizen in the form of Indian Company’s Shares or foreign currency bonds | 10% |
| 196D | Payment made to foreign investors in the form of securities | 20% |
The exchange rate for TDS return is set by the RBI (Reserve Bank of India). The exchange rate of that day is considered on the day of deduction.
The details of the payer, payee, challan, and deduction are required to be filled in the Form 27Q. The details are as given below:
* The Payer
1. Name of the Payer
2. Address
3. PAN Number
4. TAN Number
5. Contact Details
6. Financial Year
7. The Year of Assessment
8. An Original Statement or Receipt Number of the return already filed previously in the same quarter
* The Payee
1. Name of the Payee
2. The branch of the division for collection
3. Complete Address
4. Contact number
5. PAN Number
6. Telephone number
7. Email ID
* Challan
1. The Serial number of Challan
2. TDS amount
3. Surcharge amount
4. BSR Code
5. Education Cess amount
6. Amount of Interest
7. The Total of Tax Deposit
8. The number of Demand Draft or Cheque (if applicable)
9. The collection code
10. The tax deposit date
11. Method of TDS deposition
* Deduction
1. Name of the Tax Collector
2. PAN Number
3. Amount paid to the Payee
4. Amount of TDS deducted
If the PAN number of the NRI is not available, then the details such as TIN (Tax Identification Number), country of residence, permanent address, contact details, and email ID should be mentioned in Form 27Q.
| Quarter | Duration of Quarter | Due Date of Quarter |
|---|---|---|
| Quarter1 | April 1 to June 30 | July 31 |
| Quarter2 | July 1 to September 30 | October 31 |
| Quarter3 | October 1 to December 31 | January 31 |
| Quarter4 | January 1 to March 31 | May 31 |
Form 27Q consists of three main sections, which include the statistics of the voucher, payment details, and the deduction details. Statistics of Voucher:
The statistics of the voucher, records all the transactions and categorizes them into correct transactions, adequate transactions, and incorrect transactions.
These transactions are considered correct and form a part of the form 27Q. These transactions as are called ‘Included’ for creating form 27Q.
*Booking entries with or without TDS deduction
*Entries of TDS deduction
*Advance payment made
*Adjustment entries of TDS made towards government entities
*TDS reversals accounting entries
*TDS deductions for escalation and reductions
The transactions mentioned below do not require TDS deduction and hence will be excluded while generating the form.
* Entries where TDS is not applicable
* Entries made while using the given below voucher types
1. Inventory vouchers
2. Contra
3. Sales order
4. Payment voucher
5. Debit note
6. Purchase note
7. Credit note
8. Payroll vouchers
9.Optional vouchers
Uncertain transactions are transactions which are not eligible for either included or excluded transactions. The transactions in which Masters and Transactions parts have insufficient information filled in are listed as uncertain transactions.
The deduction details section showcases the type of deduction under which all included transactions are categorized. They are classified as follows:
* Deduction made at Normal Rate
*Lower Rated Taxable Expense
*Deduction made at Higher Rate
*Under Limit of Exemption
*Taxable Expense at Zero Rate
*Except instead of PAN Available
This section categorizes the tax deducted, deductible tax and assessable value in the above categories and mentions them in the form.
This section of the form contains all the details of TDS payments that are available in the records up to the most recent entry. It contains only those entries which are relevant to the present period of TDS return filing. Any other entries that are not of this period or those which are not TDS payment entries will not be mentioned here. This area will show the payments made against included and excluded transactions.
TDS needs to be deducted while the payment is done to an NRI. The particulars of the TDS subtracted as well as the rate at which it is deducted has to be stated in the sales deed made between the buyer and the NRI seller. As cited above, the TDS should be deducted by the buyer and is then deposited by a challan on or before the 7th of the next month. This deposit should also be done by the payer. After the deposition of TDS, the payer needs to fill form 27Q and submit the TDS return before the due date of filing for that quarter.
The TDS return can be prepared only by using the NSDL e-Gov e-TDS/TCS Return Preparation Utility (RPU) which is available for free download from the website of TIN. The return, once prepared, needs to be submitted to any of the TIN FCs which have been established by NSDL e-Gov.
Once the return is filed, the taxpayer can check the status of the TDS return on the website of NSDL. For opening the return status, the taxpayer needs to enter PAN and the provisional receipt number or the token number on the website.
TDS Deduction
If the TDS is not deducted on time, then 1% interest needs to be paid by the taxpayer. This 1% interest is levied on a monthly basis or for the days spent between the due date of deduction and the actual date of deduction.
Similarly, if the TDS is not deposited, interest at the rate of 1.5% per month or part of the month spent between the actual date of deduction and the actual date of deposition is levied.
Late filing of 27Q
Under section 234E, late filing of form 27Q attracts a minimum penalty of Rs. 200/day until the date of filing and a maximum penalty of an amount equal to the TDS deducted.
Under section 271H, the non-filing of form 27Q attracts a penalty of minimum Rs. 10,000 and a maximum of Rs. 1,00,000.
Under section 271H, no penalty is levied if the following conditions are met:
*The TDS is deposited to the government
*The interest and fees of late filing are already deposited
*Return is filed before the completion of 1 year from the due date
An individual or the organization filing the TDS return with form 27Q can download and save the form for future use. It can be done from the official TIN website - https://www.tin-nsdl.com/.
On the website, go to the 'downloads tab' and choose quarterly returns. From there you will be directed to another page. From this page, select the form you want to download.
After the TDS returns are filed, the payer can issue the Form 16A or a TDS certificate to the non-resident. This TDS certificate needs to be delivered to the non-resident seller within 15 days from the last date of filing TDS returns for the respective quarter
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