Form 27Q

What is Form 27Q?

Form 27Q is a quarterly statement that details the Tax Deducted at Source (TDS) from payments other than salary made to Non-Resident Indians (NRIs) and foreigners. It provides the government with a record of these transactions, ensuring tax compliance. The form must be furnished quarterly on or before the due date.

Parties Involved Under Form 27Q

Under Section 195 of the Income Tax Act, there are two parties involved in TDS payments related to Form 27Q:

• Payer: The payer is the individual, organization, or HUF (Hindu Undivided Family) that makes the payment to an NRI and is responsible for deducting TDS before transferring the amount.

• Payee: The payee is the individual who receives the income. Their residential status must align with Section 6 of the I.T. Act.

Information Required on Form 27Q

Form 27Q requires the following details:

• Payer Details:

  • PAN (Permanent Account Number)

  • TAN (Tax Deduction and Collection Account Number)

  • Contact Details

  • Name and Address

  • Financial Year and Assessment Year

  • Statement Type (Original or Revised)

• Payee Details:

  • PAN

  • Telephone Number, Email ID, Complete Address, and Contact Number

  • Name

  • Branch or Division

• Challan Details:

  • TDS Amount

  • BSR Code and Collection Code

  • Tax Deposit Date and Method

  • Education Cess Amount and Interest Amount

  • Total Tax Deposit

  • Cheque or Demand Draft Number

• Deduction Details:

  • PAN

  • TDS Amount Deducted

  • Name of the Tax Collector

  • Amount Paid to the Payee

• If the NRI's PAN is unavailable, the following details are required: Tax Identification Number (TIN), country of residence, permanent address, contact information, and email ID.

Filing Process to File TDS with Form 27Q

Here’s how to file TDS using Form 27Q:

• Deduct TDS: TDS must be subtracted from payments made to NRIs, as per the agreed rate specified in the sales agreement.

• Deposit TDS: The deducted TDS must be deposited through a challan on or before the seventh of the following month.

• File Form 27Q: After depositing the TDS, complete Form 27Q and submit the TDS return before the filing deadline for that quarter.

• Issue TDS Certificate: After filing the TDS return, the payer should provide Form 16A or a TDS certificate to the non-resident payee within 15 days of the filing deadline.

Conclusion

Form 27Q is an essential component of the Indian taxation system, ensuring that TDS is accurately deducted and reported for payments made to NRIs. By understanding the requirements and processes outlined in this article, payers can ensure compliance and avoid potential penalties.