In this article, we will discuss about...
Introduction
Form 27Q is a TDS Return which is required to be filed at the time when TDS is deducted and deposited while making payments (other than Salary) to Non-Resident Individual (On or after it will be called as NRI).
In simple words, when the buyer of a Property from NRI or Payer of an Amount to an NRI Person makes certain payments, as specified below, to A Non Resident person, then he is required to deduct TDS (Tax Deducted at Source ) at the time of the making of the payment. Such TDS should be deposited by the buyer on or before 7th of Next Month in which TDS has been deducted.
Once the TDS has deposited, Buyer is also required to file TDS return in form 27Q in TDS return. This return is required to be furnished quarterly.
Sections 194E, 194LB, 194LC, 195, 196A, 196B, 196C & 196D are also covered for which return has been filed in form 27Q.However, in this article, we are only going to discuss the online filing of ITR form 27Q in case of buying a property from an NRI person or making a payment to An NRI.
Persons covered as Deductor and Deductee
Deductor i.e. Person making payment and deducting TDS in current scenario Buyer of NRI property or Person making payment to an NRI person: All Assess
Deductee i.e. The NRI person receiving Payment: All Assets
Contents of Form 27Q
- Quarter Ended for which return has been filed.
- Financial Year in which return is to be filed
- Details of Deductor and Deductee:
- Name
- TAN Number
- PAN Number and
- Address
Note: If NRI does have PAN Number then he may show Tax Identification Number (TIN).
- Details of Amount paid to NRI.
- Details of Challan deposited of Amount which has been deducted on the payment to be made to NRI.
- The breakup of the name of NRI wise details in the separate annexure.
- DSC Signature by the deductor of Tax.
Due Dates
- The due date for the deposit of TDS is as follows:
| S.No. | Particulars | Due Date |
| 1 | From April to Feb | 7th of Next Month |
| 2 | For the Month of March | 30th April 2020 |
- The due date for filing of 27Q TDS Return
| Quarter | Period | Due Date |
| 1st | 01.04.2019 To 30.06.2019 | 31.07.2019 |
| 2nd | 01.07.2019 To 30.09.2019 | 31.10.2019 |
| 3rd | 01.10.2019 To 31.12.2019 | 31.01.2020 |
| 4th | 01.01.2020 To 31.03.2020 | 31.05.2019 (In Last quarter, we have given 2 month time period) |
Nature of Payment
If the buyer makes certain kind of payments, then he will be required to deduct TDS at the following rates:
| SECTIONS | Payments in Respect of | RATES |
| 194E | Sportsmen/ Sports Associations | 20% |
| 194LB | interest in an infrastructure debt fund | 5% |
| 194LC | Interest payment for the money borrowed by a domestic Company or a business trust in foreign currency under a loan agreement or by way of issue of long-term bonds (including long-term infrastructure bond) | 5% |
| 195 | Other Sums Payable to NRI | |
| Investments by any NR Indian citizen | 20% | |
| Investments from assets other than specified assets in the form of long-term capital gains | 10% | |
| Unlisted securities or shares of the company other than a public company. Capital gains in respect of such asset as computed without giving effect to the first and second proviso to section 48; | 10% | |
| Any capital assets whose gain is covered U/s 112A as Long term capital gain (LTCG) | 10% | |
| Any capital assets whose gain is covered U/s 111A as Short term capital gain (STCG) | 15% | |
| Any other payment made to non- residents that form part of their income by way of long-term capital gains [not being long-term capital gains referred to in section 10(33), 10(36) and 112A | 20% | |
| Interest on money borrowed or debt incurred in foreign currency by Government or the Indian concern (not being income by way of interest as defined in Section 194LB or Section 194LC) | 20% | |
| Royalty in relation with the transfer to rights of copyrights, computer software and other agreements by Government or an Indian Concern. | 10% | |
| Fees for technical services by Government or an Indian concern | 10% | |
| Any other income | 30% | |
| 196B | Units to an offshore fund | |
| 196C | Foreign currency bonds or shares of Indian Company | 10% |
| 196D | Payment to foreign institutional investors in respect of securities (not being a dividend or capital gain arising from such securities) | 20% |
Example: Mr. X has purchased capital assets from NRI for Rs.10 Lakh on 17th July 2019.
Mr. X shall deduct the TDS @ 20% U/s 195 i.e., 2 lakh and makes a payment of Rs. 8 Lakh.
Since the TDS has been deducted on 17th July 2019, Mr. X is required to deposit the TDS on before 7th of Next Month i.e. 07th August, 2019.
Also, the period relates to the 2nd quarter hence, he shall file the form 27Q as TDS Return on or before 31st Oct 2019.
Return Filing Status
The Taxpayer can check the status of the return by using the PAN Number and Provisional Receipt number or token number generated from NSDL website.
TDS Challan Details
In 27Q TDS Return, the deductor is required to mention the following details of TDS Challans
| Sr. No. |
| Section Code |
| TDS Amount |
| Surcharge Amount |
| Interest Amount |
| Others Amount |
| Total tax deposited Amount |
| Cheque / DD No. (if any) |
| BSR code |
| The date on which tax deposited |
| Transfer voucher / Challan serial No.2 |
| Whether TDS deposited by book entry? Yes/No 3 |
Payment at Lower Rate
If the deductor has deducted the TDS at a lower rate as specified in the above sections, then he should have a Lower or NIL TDS certificate as mentioned U/s 197, Which is Issued by Income Tax Department after online Filing of ITR Form 13.
Interest/Penalty
In the following cases, interest or penalty shall be levied on deductor:
Interest in respect of Non-deduction or Non Payment of TDS
| Case | Particulars | Rate of interest | Period | |
| 1 | If the deductor has not deducted the TDS | 1% per month or part of the month | From Due date of deduction to the actual date of deduction | |
| 2 | If the deductor deduct the TDS but not deposited | 1.5% per month or part of the month | From the actual date of deduction to the actual date of deposit | |
The penalty in respect of late submission or non-submission of form 27Q
| Case | Particulars | Penalty Under Section | Minimum Penalty | Maximum Penalty |
| 1 | Late submission of form 27Q | 234E | Rs. 200 per date up to the filing of return | Maximum up to the number of TDS deducted |
| 2 | Non-submission of form 27Q | 271H* | 10,000.00 | 1,00,000.00 |
*However, the penalty U/s 271H shall not be levied, if the following conditions are fulfilled:
- The deductor has proved that there was sufficient cause for not submitting the return on time.
- He has filed the return with late filing fees and other interest.
- The return has been filed before the expiry of one year from the due date.
Procedure to file Form 27Q, In summarized form
- Buyer receipts some specified kind of services or goods from an NRI.
- The buyer makes a payment after deducting TDS.
- TDS should be deposited on or before 7th of Next Month.
- TDS details to filed on a quarterly basis in form 27Q.
- In 27Q TDS Return. the buyer is required to enter Challan details, Deductor (Own) Details, NRI details.
If the buyer makes the final payments to an NRI seller and registers the property on Dec 5th, can he file the 27Q immediately instead of waiting until Jan of the next year?
Please contact our NRI Desk at cs@aktassociates.com or 8080088288.
For proper clarification.