Form 27Q - Quarterly TDS Statement Non-Residents

In India, when payments are made to non-residents, the Income Tax Act mandates the deduction of Tax Deducted at Source (TDS) on various types of income. Form 27Q is the designated quarterly statement used by deductors to report these TDS transactions related to payments made to non-residents (including foreign companies).

What is Form 27Q?

Form 27Q is a comprehensive statement filed quarterly by any person (other than an individual or a HUF who is not liable to get their accounts audited) responsible for deducting tax on payments made to non-residents. This includes interest, dividends, professional fees, royalty, capital gains, etc.

Key Aspects of TDS on Payments to Non-Residents (Section 195):

The primary section governing TDS on payments to non-residents is Section 195 of the Income Tax Act. Key considerations include:

• Applicability: Covers payments made to non-residents which are chargeable to tax in India.
• Higher Rates: TDS rates for non-residents can be higher compared to residents and are often subject to specific sections or rates prescribed by the Act, or beneficial rates under Double Taxation Avoidance Agreements (DTAAs).
• Types of Income: Common incomes requiring TDS under this form include:
  • Income from units of a Mutual Fund.
  • Payments to Offshore Funds.
  • Income from Foreign Currency Bonds or Global Depository Receipts.
  • Income of Foreign Institutional Investors (FIIs) from securities.
  • Interest on foreign currency loans.
  • Royalty and Fees for Technical Services (FTS).
  • Capital Gains.

Information Reported in Form 27Q:

Form 27Q requires detailed information, including:

• Deductor Details: Name, address, and TAN of the deductor.
• Deductee Details: Name, address, and Permanent Account Number (PAN) of the non-resident deductee. If PAN is not available, specific rules regarding higher TDS rates (referencing Section 206AB in general contexts) apply.
• Payment Details: Nature of payment, date of payment/credit, and the amount on which TDS was deducted.
• TDS Details: Date of deduction, TDS amount, and the relevant section of the Income Tax Act.
• Challan Details: Information about the tax deposited, including challan number, date of deposit, and BSR code.
• DTAA Details: If the benefit of a Double Taxation Avoidance Agreement is claimed by the non-resident, relevant details of the DTAA and the certificate furnished by the deductee must also be provided.

Due Dates for Filing Form 27Q:

Similar to other quarterly TDS statements, the due dates for filing Form 27Q are:

• Q1 (April to June): July 31st of the financial year.
• Q2 (July to September): October 31st of the financial year.
• Q3 (October to December): January 31st of the financial year.
• Q4 (January to March): May 31st of the subsequent financial year.

TDS Certificate for Non-Residents:

After filing Form 27Q and depositing the TDS, the deductor is required to issue a TDS certificate (generally Form 16A, with specific adaptations for non-residents) to the deductee. This certificate enables the non-resident to claim credit for the tax deducted in their Income Tax Return in India or their home country (as per DTAA provisions).

The e-filing process for Form 27Q is conducted online through the official e-filing portal or authorized software.