What is Form 27Q
Form 27Q is a TDS return/ statement that includes the details of TDS deducted on non-salary payments made for a Non-Resident Indian (NRI) and foreigner, for example TDS on sale of property by NRI. The Indian citizen making payment to the NRI needs to submit Form 27Q at every quarter before the due date.
Types of Payments Covered under Form 27Q
TDS is applicable at the prescribed rate on different types of payments made to NRIs and foreigners. Followings are types of payments covered under Form 27Q:
- Payments made to non-resident sportsman/ sports club
- Income earned by FII from securities
- Income in respect of Units of Non-Residents
- Interest income from investment in individual bonds and government securities
- Interest income from the infrastructure debt fund
- Income from Foreign Currency Bonds or Shares of Indian Company Payable to Non-Resident
- Interest income from an Indian company engaged in specific business activities
- Investment fund paying an income to a unitholder
- Income earned from investment in the securitization trust
Participants in the Form 27Q
There are two parties involved in TDS payment under Section 195 of the Income Tax Act – payer and payee.
Payer
The payer is an individual, the organization, Hindu Undivided Family (HUF) responsible for deducting TDS before making payment to the NRI.
Payee
Payee is the NRI beneficiary who receives the income in return of products or services. The residential status of the Payee is determined in accordance with Section 6 of the IT Act.
Information required for filing Form 27Q
While filing the Form 27Q, following details about the payer, payee, challan and deduction are required.
| Entity | Information Required |
|---|---|
| Payer | Name of the payer, PAN Number, TAN Number, Contact Details, Address, Financial Year, Assessment Year, |
| Payee | Name of the payee, PAN Number, telephone number, email ID, complete address, branch of the division |
| Challan | TDS amount, BSR code, the collection code, the tax deposit date, education cess amount, TDS method deposition, interest amount, the total tax deposited, demand draft/ cheques |
| Deduction | PAN, TDS amount deducted, name of the tax collector, amount paid to the NRI |
In case the NRI PAN number is not available, additional details of the NRI such as TIN, Permanent Address, Country of residence, Email and Contact details need to be mentioned in the Form 27Q.
How to file TDS with Form 27Q
TDS must be subtracted by the buyer from the payment made to NRI. The sales agreement entered into between the buyer and NRI must mention the details about the TDS deducted, including the rate at which TDS was deducted.
The TDS must be deposited by the buyer via a challan on or before the seventh of the following month.
Form 27Q Filing Due Date – Quarterly
| Quarter | Due Date |
|---|---|
| Quarter 1 | On or before July 31 |
| Quarter 2 | On or before October 31 |
| Quarter 3 | On or before January 31 |
| Quarter 4 | On or before May 31 |
TDS Certificate
The buyer may hand over the Form 16A or a TDS certificate to the Non-Resident after filing the TDS returns in the Form. The TDS certificate should be sent to the NRI seller within 15 days of the deadline of filing TDS returns for the respective quarter.
Due to a complicated tax system and recurrent amendments, understanding tax laws can be confusing and NRIs may be subject to additional fees or miss claiming deductions and other benefits. At SBNRI, we understand this struggle. You can download SBNRI App to connect with our NRI Tax Experts to know more about new TDS/ TCS rules for NRIs. You will also get end-to-end assistance related to NRI tax filing.
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FAQs
Form 27Q is a TDS return or statement that has the details of TDS deducted on payments, other than salary, made for a Non-Resident Indian (NRI) and foreigner, for example TDS on sale of property by NRI. Form 27Q must be submitted on time on a quarterly basis.
An individual who is buying a product or service from an NRI is required to submit the Form 27Q for non-salary payment to the NRI, at every quarter.
An Indian is required to deduct TDS from payments of specified nature made to NRI at the appropriate rate.
You can prepare the return online via NSDL e-Gov e-TDS/TCS Return Preparation Utility (RPU) that can be downloaded from the website of TIN. Prepared returns have to be submitted to the TIN-FCs established by NSDL e-Gov.
