“What is Form 27Q?”, “How to file Form 27Q online TDS Return?” And Classification of Form 27Q – NRI TDS Returns

Introduction 

Form 27Q is a TDS Return or Statement that shows the amount of tax deducted at source (TDS) on payments made to non-resident Indians (NRIs) and foreigners other than salaries. On a quarterly basis, Form 27Q must be submitted on or before the due date. Form 27Q gives information about payments made and TDS deducted by the deductor on payments made to NRIs. In this article, there is detailed information on “What is Form 27Q?”, “How to file Form 27Q Online?”, and other information on Form 27Q TDS (Tax Deducted at Source).

What is Form 27Q?

The statement of the return for non-salary payments made to an NRI is Form 27Q. Every quarter, the Indian buyer is expected to submit Form 27Q before the due date. According to the 2016 Financial Budget, non-resident Indians who do not have a PAN (Permanent Account Number) are not required to pay a higher TDS rate. The information on Form 27Q pertains to payments made by the payer to a non-resident in that quarter.

Information on the nature of payment covered under Form 27Q TDS

Every deductor who makes a specified payment to a Non-Resident Indian is required to deduct TDS at the stipulated rate from that payment. The types of payments covered by Form 27Q are as follows:

• Sports Associations and Payments to Non-Resident Sportsmen.

• Other amounts are owed to non-residents.

• Foreign institutional investors’ income from securities.

• Income from Non-Residents’ Units.

• Interest on individual bonds and government securities is a source of income.

• Payments to an Offshore Fund in respect of Units.

• The infrastructure Debt Fund generates income in the form of interest.

• Payment of the accumulated balance of the provident fund, taxable in the hands of the employee 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.

• Profit on the investment in the securitization trust.

How to file Form 27Q online TDS Return?

Only the NSDL e-Gov e-TCS / TDS Return Preparation Utility (RPU), which is available for free download on the TIN website, can be used to prepare the TDS return. Once the return is completed, it must be submitted to one of the TIN FCs created by NSDL e-Gov.

The taxpayer can check the progress of the TDS return on the NSDL website once it has been lodged. The taxpayer must enter his or her PAN and the provisional receipt number or token number on the website to check the status of his or her refund.

Procedure to Download TDS Return Form 27Q

Form 27Q can be downloaded and saved for future use by an individual or an entity filing a TDS return. It can be done from the Official Website TIN (Tax Identification Number).

Go to the ‘downloads tab’ on the website and select quarterly returns. You’ll be taken to another page after that. Choose the form you wish to download from this page.

Late Filing of Form 27Q

• TDS (Tax Deducted at Source) Deduction

If the TDS is not deducted on time, the taxpayer is responsible for paying 1% interest. This 1% interest is charged monthly or for the days between the due date of the deduction and the actual date of the deduction.

If the TDS is not deposited, interest is charged at the rate of 1.5 percent per month or part of a month spent between the actual date of deduction and the actual date of deposition.

• Late Filing of Form 27Q 

Late filing of form 27Q is subject to a minimum penalty of Rs. 200 per day until the date of filing and a maximum penalty equal to the TDS deducted under section 234E.

Non-filing of form 27Q is punishable under section 271H with a minimum penalty of Rs. 10,000 and a maximum penalty of Rs. 1,00,000.

If the following conditions are met, no penalty is imposed under section 271H:

1. The Tax Deducted at Source is paid to the government and deposited there.

2. The late filing interest and fees have already been deposited.

3. Before one year has passed since the due date, the return is filed.

Classification of Form 27Q – NRI TDS Returns

The voucher statistics, payment data, and deduction details are all included in the three main parts of Form 27Q. Voucher Statistics:

The voucher’s statistics keep track of all transactions and divides them into three categories: adequate transactions, accurate transactions, and incorrect transactions.

• Transactions that are Included

These transactions are correct and are included in form 27Q. For producing form 27Q, these transactions are referred to as ‘Included.’

1. TDS deduction or no TDS deduction when booking entries.

2. Tax Deducted at Source deduction entries.

3. Payment in advance has been made.

4. TDS adjustment entries are made in the direction of government entities.

5. Accounting entries for TDS reversals.

6. TDS escalation and decreased deductions.

• Transactions that are Excluded

The transactions listed below do not require TDS deduction and will thus be excluded from the form generation.

TDS (Tax Deducted at Source) is not required for some entries.

• Entries made using the voucher types listed below

• Vouchers for inventory

• Order of Sales Opposition

• Voucher for payment

• Note of debit

• Payroll Vouchers

• Note on the Purchase

• Optional Vouchers

• Note of credit

Transactions with Uncertainty

Uncertain transactions are those that do not fit into either the included or excluded categories. Uncertain transactions are those in which the Masters and Transactions portions have inadequate information filled in.

• Specifics of the deduction

The type of deduction under which all included transactions are classified is displayed in the deduction details section. The following is a list of their classifications:

1. At the Normal Rate, a deduction is made.

2. Taxable Expense with a Lower Rating

3. Amount deducted at a Higher Rate

4. Exemptions are limited.

5. Zero-Rate Taxable Expense

6. Except that instead of PAN,

This section categorizes and mentions the tax deducted, deductible tax, and assessable value in the above categories.

• Payment information

This portion of the form comprises all TDS (Tax Deducted at Source) payment data up to the most recent entry that are accessible in the records. It only contains records that are relevant to the current TDS Return filing period. Any other entries that aren’t from this era or aren’t TDS payment entries will be omitted from this list. The payments made against included and excluded transactions will be displayed in this section.

Conclusion

Hopefully, the information provided above will assist you in properly understanding the Form 27Q and completing it without making any mistakes. Whatever the case may be, timely submission of TDS returns is critical. You must be sure to pay your taxes on time as a responsible citizen who wishes to contribute to India’s growth and development. After all, our country deserves responsible citizens.