Form 27Q – TDS for non-residents
Detailed overview of Form 27Q TDS
In this post, we will discuss Form 27Q-TDS for non-residents. Let’s look at each section in detail :
What is Form 27Q?
Form 27Q is a report that gives the TDS (Tax Deducted at Source) information for payments made to Non-Resident Indians (NRIs) other than income. It must be filed each quarter before the deadline.
According to the 2016 Budget, NRIs must have a PAN (Permanent Account Number) to pay a higher TDS rate if specific conditions are met. This form contains information about the payments and the applicable TDS deductions.
Parties Involved in form 27Q
Under Section 195, two persons are engaged in TDS payment:
Payer
A payer is a person, organisation, or HUF who pays an NRI and is liable for paying TDS before transferring the money to the non-resident Indian.
Payee
The Payee is the one who receives the income. The Payee’s residential status must be in accordance with Section 6 of the Income Tax Act.
TDS reports under Form 27Q do not contain payments such as dividends paid to NRIs, salaries, and interest income as specified in sections 195LB/LC/LD.
Details Required to be filled in form 27Q
Form 27Q requires the payer, Payee, Challan, and deduction details. Details are listed below:
1. The payer
- PAN Number
- TAN Number
- Contact Information
- Payer’s name and address
- Financial Year
- The Year of Assessment
- Original Statement or Receipt Number of the previously filed return in the same quarter.
2. The payee
- PAN Number
- Telephone Number
- Email ID
- Complete Address
- Contact Number
- Payee’s name and divisional branch.
3. Challan
- Serial Number
- BSR Code
- Amount of Education Cess (EC)
- Amount of Surcharge
- Interest Amount
- Total Tax Deposit
- Tax Deposit Date
- Tax Deposit Method
- Collection Code
- Number of cheques or demand drafts
4. Deduction
- The name of the tax collector
- PAN number
- TDS deduction amount
- Amount Given To The Payee
Due Dates For Filing TDS Form 27Q
The due date for filing Form 27Q for each quarter is as follows
Quarter | Period | Due Date |
Q1 | April 1st – June 30th | July 31st |
Q2 | July 1st – September 30th | October 31st |
Q3 | October 1st – December 31st | January 31st |
Q4 | January 1st – March 31st | May 31st |
Components of form 27Q
Form 27Q consists of three sections: Deduction details, statistics of vouchers, and payment details.
1. Deduction details
This section indicates the type of Deduction for which each listed transaction is classified. Deduction details are divided into the following types:
- Deduction at Normal Rate
- Deduction at Higher Rates
- Lower Rated Taxable Expense
- Taxable expenses are zero-rated and fall under the exemption limit, except for PAN.
The tax-deductible, assessable value and tax deducted for transactions falling into the categories listed above are shown below.
2. Statistics of voucher
All transactions, whether accurately, inadequately, or mistakenly documented, will be registered and categorised in the Form 27Q as follows:
Included Transactions
Transactions deemed as included for creating form 27Q are listed here:
- Book entries with or without TDS deduction.
- TDS Deduction Entries
- Advance payments are given to parties.
- TDS Adjustment Entries for Government Entities
- Entries accounting for TDS reversals and TDS deduction relating to escalations and de-escalations
Excluded Transactions
The transactions considered Excluded for creating Form 26Q are described in full below:
- All entries where TDS is not applied.
- Entries are recorded using any of the following voucher types:
- Payment,
- Contra
- Inventory Vouchers
- Order Types: Sales and Purchase
- Debit Note (recorded for purchases without TDS implications).
- Credit Note (entries without TDS consequences)
- Optional payroll vouchers.
Uncertain Transactions
- Masters
- Transactions
3. Payment details
- Included Transactions
- Excluded Transactions
Procedure for TDS deduction under form 27Q
When paying a Non-resident Indian (NRI), deduct TDS. The selling agreement between the NRI seller and the buyer should include information concerning the TDS deducted and the rate. The buyer is responsible for depositing the TDS amount via a challan on or before the 7th of the following month.
After depositing TDS, the buyer must file a TDS return with Form 27Q within 15 days of the quarter’s end.
Late filing of 27Q
If you submit form 27Q late, you may be subject to a penalty under Section 234E. The penalty is Rs. 200 per day until you file, with a maximum penalty equal to the TDS deducted.
The minimum and maximum penalties for failing to file form 27Q are Rs. 10,000 and Rs. 1,00,000, respectively.
Section 271H charges no penalty if the following requirements are met:
- The TDS is deposited with the government.
- The interest and costs for late filing have already been deposited.
- Return is filed before the end of one year from the due date.
How to download Form 27Q
If you are filing a TDS return with form 27Q, you can quickly download and store the form for future use. Go to the official TIN website athttps://www.tin-nsdl.com/.
Navigate to the ‘downloads tab’, click on quarterly returns, and select the form you want to download.
TDS Certificate
After submitting the TDS returns, you must present the non-resident with either Form 16A or a TDS Certificate. Make sure to give it to them within 15 days of the last day to file TDS returns for that quarter.
We have concluded this post on Form 27Q-TDS for non-residents. Feel free to share your views and opinions in the comment section below.
