TDS 27Q - Details and Due Date

TDS 27Q - Details and Due Date

TDS 27Q is a Tax Deducted at Source (TDS) return filed for TDS on Payments to Non-Residents under Section 195 of the Income Tax Act. It is used to report TDS deducted on payments made to non-resident individuals, foreign companies, or other non-resident entities.

Key Details of TDS 27Q:

1. Applicability:
   • TDS 27Q applies when tax is deducted at source on payments made to non-residents. These payments can include:
     • Interest payments to non-residents.
     • Royalties, technical fees, and professional fees.
     • Dividend payments to foreign shareholders.
     • Payments under Section 195 for other types of income like capital gains, etc.
   • The deductor could be any Indian entity or individual making payments to a non-resident party, such as a company paying royalties or interest to a foreign entity.
2. Purpose of Form 27Q:
   • It is used to report TDS deductions on payments made to non-residents (both foreign individuals and foreign companies) under sections like Section 195.
   • It is specifically for reporting non-salaried payments to non-residents where TDS has been deducted.
   • The form includes details of the payee, the amount paid, the TDS deducted, and the challan payment details.
3. Key Information in TDS 27Q:
   • Deductee's Details: Information about the non-resident payee, such as their Name, Address, PAN (if available), and Country of Residence.
   • Payment Details: Information regarding the payment made, such as the type of payment (e.g., royalty, interest, dividend) and the amount paid.
   • TDS Deducted: The amount of tax deducted at source from the payment made to the non-resident.
   • Challan Details: Information about the TDS payment, including the challan number, BSR code, and the date of payment.
4. Due Date for Filing TDS 27Q: TDS 27Q is filed on a quarterly basis and the due dates for filing the return are as follows:
   • 1st Quarter (April - June): 31st July
   • 2nd Quarter (July - September): 31st October
   • 3rd Quarter (October - December): 31st January
   • 4th Quarter (January - March): 31st May (of the following assessment year)

Note: The due date for the 4th quarter return is extended to May 31st as the tax is deducted up until March and the filing is due after the financial year ends.

1. Penalty for Non-Compliance:
   • Late Filing Fee: If the TDS 27Q return is filed late, a penalty of ₹200 per day is charged under Section 234E until the return is filed.
   • Interest on Late Payment: If the TDS payment is delayed, interest is charged at the rate of 1.5% per month on the tax deducted but not deposited with the government.
   • Penalties for Incorrect Returns: Filing incorrect or incomplete returns may lead to penalties under Section 271H.
2. Challan for Payment:
   • Challan ITNS 281: The payment of TDS on non-resident payments is made through Challan ITNS 281, and the correct account head (for Section 195, typically "Income Tax on Non-Residents") must be used while making the payment.
   • The challan should reflect the correct PAN (if available) of the deductee, as well as other details related to the TDS payment.
3. Form 16A for Non-Residents:
   • After filing TDS 27Q, the deductor issues Form 16A to the non-resident payee as proof of TDS deduction. This form contains the details of the amount deducted and deposited to the government.
   • Non-resident payees can use this form for their tax filings in their respective countries or for claiming credit under tax treaties (if applicable).

Summary:

• Form 27Q is used to report TDS on payments made to non-residents, such as interest, royalties, dividends, and other specified payments.
• TDS rate: Varies based on the type of payment and the provisions of the Income Tax Act or Double Taxation Avoidance Agreement (DTAA).
• Due date: Quarterly filing, with due dates on 31st July, 31st October, 31st January, and 31st May (for the 4th quarter).
• Penalty: ₹200 per day for late filing and 1.5% interest per month for delayed payment.

Non-compliance can result in penalties, so it's important for entities making payments to non-residents to ensure that they deduct, file, and pay the TDS on time.