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Form 27Q - NRI TDS Deduction & Filing - Income Tax - IndiaFilings

Form 27Q - NRI TDS Returns

Form 27Q is a TDS Return or Statement containing details of Tax Deducted at Source (TDS) deducted on payments other than salary made to Non-Resident Indian (NRI) and foreigners. 27Q form for TDS return is required to furnish on a quarterly basis on or before the due date. Form 27Q contains details of payments made and TDS deducted on payments made to NRI by the deductor. In this article, we will look at Form 27Q TDS Return - NRI TDS Returns in detail.

Payer and Payee

The payer (irrespective of their status like HUF, individual, Firm etc.) are responsible for deducting the TDS if payment is made to a non-resident. The payee is a non-resident whose residential status is according to the Income Tax Act.

Payments Covered under Form 27Q TDS Return

Every deductor who makes payment of a specific nature to Non-Resident Indian is required to deduct TDS from such payment at the prescribed rate. Following are the nature of payments covered in the Form 27Q:
  • Payments to non-resident Sportsmen, Sport Associations
  • Other sums payable to Non-Residents
  • Income of Foreign institutional investors from securities
  • Income in respect of Units of Non-Residents
  • Income by way of interest on individual bonds and Government Securities
  • Payments in respect of Units to an Offshore Fund
  • Income by way of interest from the infrastructure Debt fund
  • Income from Foreign Currency Bonds or Shares of Indian Company Payable to Non-Resident
  • Income by way of interest from Indian company engaged in specific Business
  • Payment of the accumulated balance of the provident fund, taxable in the hands of the employee
  • Investment fund paying an income to a unitholder
  • Income in respect of investment in the securitization trust

Details Required for Filing 27Q form for TDS return

Following features are required to file Form 27Q TDS return:

Sl.No

Entity

Details
1 Deductor PAN, TAN, Name, Address and Contact Details
2 Responsible Person Name, PAN, Address and contact details
3 Challan Challan serial number, BSR Code, TDS, Surcharge and Education Cess paid
4 Deduction Deductee name, PAN, Amount paid or credited, TDS deducted and deposited
In case of non-availability of PAN with NRIs, additional details of NRI such as Tax Identification Number (TIN), Permanent Address, Country of residence, Email and Contact details are needed to be furnished in Form 27Q.

Due Date for Filing Form 27Q

The due date for Payment of TDS deducted on salary for every month is seventh of the next month. For March, it is thirtieth April of the next year. The due date for filing the Form 27Q TDS return for every quarter is as follows:

Quarter

Period

The due date for Filing Form 27Q

Q1

 1st April - 30th June On or before 31st July

Q2

 1st July - 30th September On or before 31st October

Q3

 1st October - 31st December On or before 31st January

Q4

 1st January - 31st March On or before 31st May

Sections of Form 27Q TDS return

The Form 27Q has three sections such as Statistics of Voucher, Deduction Details, and Payment Details.

Statistics of Vouchers

All transactions, whether recorded correctly, inadequately or incorrectly will be captured and categorised in the 27Q form for TDS return as follows:

Included Transactions

Transactions considered as included for generating form 27Q are given here:
  • Booking entries with or without TDS deduction
  • TDS deduction entries
  • Advance payments made to parties
  • TDS adjustment entries in the case of government entities
  • Entries accounting for TDS reversals and TDS deduction concerning escalations and de-escalations

Excluded Transactions

Transactions considered as Excluded for generating Form 26Q is explained in detail below:
  • All entries where TDS is not applied
  • Entries recorded using any of the following Voucher Types:
  • Payment
  • Contra
  • Inventory Vouchers
  • Sales Order
  • Purchase Order
  • Debit Note (recorded for purchases with no TDS implications)
  • Credit Note (entries with no TDS implications)
  • Vouchers marked as Optional
  • Payroll Vouchers

Uncertain Transactions

These transactions do not fulfil the criteria of the Included and Excluded categories. The transaction will be listed as Uncertain when there is insufficient information entered in:
  • Masters
  • Transactions

Deduction Details

This section denotes the type of deduction under which each of the included transaction is grouped. Deduction details are classified into the following types:
  • Deduction at Normal Rate
  • Deduction at Higher Rate
  • Lower Rated Taxable Expense
  • Zero Rated Taxable Expense
  • Under Exemption Limit
  • Except instead of PAN Available
The tax-deductible, assessable value and the tax deducted for transactions grouped in the above categories are displayed here.

Payment Details

This will contain the statistics of all TDS payments (deemed or actual) that exist in the data till date. This will not contain any of the payment entries that are not related to the current period. Any payment entries are other that TDS payment entry will not appear here. This section will display the payments against two fields:
  • Included Transactions
  • Excluded Transactions

Procedure to Deduct TDS

TDS must be deducted at the time of making the payment to the Non-resident Indian (NRI). The details about the TDS deducted and rate should be mentioned in the sale deed between the NRI seller and the buyer. As mentioned above, TDS deducted by the buyer should be deposited by challan for the TDS payment on or before the 7th of next month in which the TDS is deducted. The deposit needs to be made by the buyer. Once the TDS is deposited, the buyer needs to file TDS return by submitting the 27Q form for TDS return. TDS returns are filed quarterly within 15 days (next month of quarter end). Once the TDS returns are filed in the 27Q form for TDS return, the buyer can issue TDS certificate (Form 16A) to NRI seller. This TDS certificate should be issued within 15 days to the seller from the due date of TDS returns for the quarter. Also Read:  NRI Taxation in India

About the Author

RENU SURESH
Renu Suresh is a proficient writer with a knack for turning intricate legal concepts into clear, actionable advice. Her articles empower entrepreneurs by providing the knowledge they need to navigate the complexities of business laws, ensuring they can start and manage their businesses effectively.

Updated on: November 20th, 2024

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