Form 27Q is a quarterly TDS return. It reports tax deducted at source on non-salary payments made to NRIs or foreign entities under Section 195 of the Income Tax Act.
Who must file it?
- Any Indian payer—individual, business, HUF, or company—making non-salary payments (e.g., rent, interest, dividends, royalties, capital gains) to non-residents, including NRIs.
- Salaries to NRIs are handled via Form 24Q, not 27Q.
Payments Covered & TDS Rates
Typical payments requiring TDS under Form 27Q include:
- Rent, interest, dividends, royalties, fees, capital gains, sale of NRI property.
- TDS rates vary by category:
- Section 194E: 20% on sportsmen/sports associations
- 194LB/194LC: 5% on certain interest payments
- Section 195: 10–30% (e.g., 15% for STCG under §111A, 10% for LTCG under §112A, 20% for others), plus applicable surcharge & cess.
Due Dates
Form 27Q must be filed by the last day of the month following each quarter:
| Quarter | Period | Due Date |
|---|---|---|
| Q1 | Apr–Jun | July 31 |
| Q2 | Jul–Sep | Oct 31 |
| Q3 | Oct–Dec | Jan 31 |
| Q4 | Jan–Mar | May 31 |
(Taxes must be deposited via challan by the 7th of the month following deduction).
What to include
Form 27Q is divided into:
- Voucher statistics – transactions marked Included, Excluded, or Uncertain
- Payment details – challan-wise TDS deposits
- Deduction details – per-NRI details (PAN, amount paid/credited, TDS deducted) .
Requires details of payer (PAN, TAN, etc.), payee (PAN or TIN if PAN missing, address, country), and challan info .
Filing Process
- Deduct TDS at the time of payment or credit.
- Deposit tax with IT Department using Challan ITNS‑281 by 7th of the next month.
- Prepare Form 27Q using NSDL TIN-NSDL’s RPU tool. Validate via FVU.
- E-file at TIN Facilitation Centre (hard‑copy/token) or online if digitally signed.
- Issue Form 16A (TDS certificate) to NRI within 15 days of quarter’s filing due date.
Penalties & Interest
- Late TDS deduction: 1% per month
- Late deposit: 1.5% per month
- Late return filing: ₹200/day under §234E (max = TDS amount)
- Non‑filing / Incorrect: ₹10,000–₹1,00,000 under §271H, unless filed within 1 year with taxes, interest, and late fees paid
Key Takeaways
- Form 27Q covers only non-salary payments to NRIs/non-residents.
- File quarterly with accurate payer/payee and challan data.
- Use NSDL’s e‑filing tools (RPU + FVU) for submission.
- Pay TDS by 7th next month, file by month-end after quarter.
- Stay compliant to avoid steep interest & penalties.
