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Form 27Q – NRI TDS Return

Form 27Q is a TDS return/statement that reports Tax Deducted at Source on payments (other than salary) made to Non-Resident Indians (NRIs) and foreign entities. This return must be filed quarterly within the prescribed due dates. Form 27Q captures details of payments made to non-residents and the corresponding TDS deducted by the deductor. This article explains Form 27Q – NRI TDS Return in detail.

Form 27Q – NRI TDS Return

Payer and Payee

The payer, regardless of their constitution (individual, HUF, firm, company, etc.), is required to deduct TDS when making payments to a non-resident. The payee is a non-resident whose residential status is determined as per the Income Tax Act.

Payments Covered under Form 27Q

Any deductor making specified payments to an NRI must deduct TDS at the applicable rates. The following types of payments are reported in Form 27Q:

  • Payments to non-resident sports persons and sports associations
  • Other amounts payable to non-residents
  • Income of foreign institutional investors from securities
  • Income related to units held by non-residents
  • Interest income on individual bonds and government securities
  • Payments related to units of offshore funds
  • Interest income from infrastructure debt funds
  • Income from foreign currency bonds or shares of an Indian company payable to non-residents
  • Interest income from Indian companies engaged in specified businesses
  • Taxable payment of accumulated provident fund balance to employees
  • Income distributed by an investment fund to unit holders
  • Income arising from investments in a securitisation trust
Form 27Q – NRI TDS Return

Information Required for Filing Form 27Q

The following details are required to file the Form 27Q TDS return:

  • Deductor: PAN, TAN, name, address, and contact details
  • Responsible Person: Name, PAN, address, and contact details
  • Challan Details: Challan serial number, BSR code, TDS amount, surcharge, and education cess paid
  • Deduction Details: Deductee name, PAN, amount paid or credited, and TDS deducted and deposited

If the PAN of the NRI is not available, additional information such as Tax Identification Number (TIN), permanent address, country of residence, email ID, and contact details must be provided in Form 27Q.

Due Date for Filing Form 27Q

The due date for depositing TDS deducted on salary payments is the 7th of the following month. For deductions made in March, the due date is 30th April of the next financial year. The quarterly due dates for filing the Form 27Q TDS return are as follows:

Quarter Period 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
Form 27Q – NRI TDS Return

Sections of Form 27Q TDS Return

Form 27Q consists of three main sections: Statistics of Vouchers, Deduction Details, and Payment Details.

Statistics of Vouchers

This section captures and classifies all transactions, whether correctly recorded, partially recorded, or incorrectly entered, in the Form 27Q TDS return.

Included Transactions
 The following transactions are treated as included while generating Form 27Q:

  • Booking entries with or without TDS deduction
  • Entries where TDS has been deducted
  • Advance payments made to parties
  • TDS adjustment entries for government entities
  • Entries related to TDS reversals and TDS deductions arising from escalations or de-escalations

Excluded Transactions
 The following transactions are excluded from Form 27Q generation:

  • Entries where TDS is not applicable
  • Entries recorded under the following voucher types:
    • Payment
    • Contra
    • Inventory vouchers
    • Sales order
    • Purchase order
    • Debit note (for purchase entries without TDS impact)
    • Credit note (entries without TDS impact)
  • Vouchers marked as optional
  • Payroll vouchers
Form 27Q – NRI TDS Return

Uncertain Transactions
 Transactions that do not clearly fall under included or excluded categories are classified as uncertain. Such transactions arise due to incomplete or insufficient information in:

  • Masters
  • Transactions
  • Deduction details

Deduction Details

This section reflects the nature of deduction under which each included transaction is classified. Deduction categories include:

  • Deduction at normal rate
  • Deduction at higher rate
  • Lower-rated taxable expense
  • Zero-rated taxable expense
  • Under exemption limit
  • Except where PAN is available

For each category, the taxable amount, assessable value, and TDS deducted are displayed.

Payment Details

This section provides details of all TDS payments, whether actual or deemed, available in the data up to the reporting date. It excludes any payment entries not related to the relevant period, and only TDS payment entries are shown. Payments are reflected under:

  • Included transactions
  • Excluded transactions

Procedure to Deduct TDS

TDS is required to be deducted at the time of making payment to a Non-Resident Indian (NRI). The applicable TDS rate and related details must be clearly mentioned in the sale deed executed between the NRI seller and the buyer. As stated earlier, the TDS deducted by the buyer must be deposited through a challan on or before the 7th day of the month following the month in which the deduction is made. The responsibility for depositing the TDS lies with the buyer.

After depositing the TDS, the buyer is required to file the TDS return by submitting Form 27Q. TDS returns are filed on a quarterly basis within 15 days from the end of the respective quarter. Once the Form 27Q TDS return is filed, the buyer can issue the TDS certificate in Form 16A to the NRI seller. This certificate must be issued within 15 days from the due date of filing the quarterly TDS return.

Changes in Form 27Q: Reporting Partner Payments under Section 194T

Form 27Q has been updated to include provisions under Section 194T, which relates to payments made to non-resident partners. The revised form now contains a separate entry for Section 194T in addition to the existing Section 195. This change is intended to simplify the reporting of TDS on payments to non-residents and ensure accurate disclosure of all applicable deductions.

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Frequently Asked Questions (FAQs)

Any person or entity responsible for making specified payments to a Non-Resident Indian (NRI) or foreign entity must file Form 27Q. This includes individuals, HUFs, companies, partnership firms, LLPs, trusts, and other deductors who deduct TDS on such payments under the Income Tax Act.

To successfully file Form 27Q, the deductor must furnish:

  • PAN and TAN of the deductor

  • Name, address, and contact details of the deductor

  • Details of the responsible person

  • Deductee (NRI) details such as name, PAN (or TIN/passport details if PAN is unavailable)

  • Nature of payment

  • Amount paid or credited

  • Rate and amount of TDS deducted

  • Challan details for TDS deposited

Form 27Q applies to various non-salary payments made to NRIs and foreign entities, including:

  • Interest income

  • Income from securities and investments

  • Royalties and technical service fees

  • Payments to non-resident sportspersons or sports associations

  • Income from foreign currency bonds or shares of Indian companies

  • Provident fund withdrawals by NRIs

  • Any other income chargeable to tax in India

Form 27Q is divided into the following key sections:

  • Voucher Statistics: Categorizes transactions as included, excluded, or uncertain

  • Deduction Details: Provides information on the nature and classification of TDS deductions

Payment Details: Contains statistics of TDS payments deposited with the government

TDS must be deducted at the time of credit of income to the NRI’s account or at the time of payment, whichever is earlier. The deducted TDS must be deposited using a challan on or before the 7th day of the following month in which the deduction is made.

After filing Form 27Q and depositing the applicable TDS, the deductor must issue Form 16A (TDS Certificate) to the NRI. This certificate should be provided within 15 days from the due date of filing the quarterly TDS return.

Form 27Q is a quarterly TDS return that contains details of tax deducted at source on payments made to Non-Resident Indians and foreign entities, excluding salary payments. It is filed by the deductor who makes the payment and deducts tax under applicable sections of the Income Tax Act.

Correct filing of Form 27Q ensures:

  • Proper credit of TDS in the NRI’s tax records

  • Smooth processing of the NRI’s income tax return

  • Compliance with Indian tax laws

  • Avoidance of penalties, interest, and notices from the Income Tax Department

Form 27Q has been updated to include Section 194T, which deals with TDS on payments made to non-resident partners. The revised form now allows reporting under both Section 195 and Section 194T, simplifying compliance for deductors.

Late or incorrect filing of Form 27Q may attract:

  • Late filing fees under Section 234E

  • Penalties under Section 271H

  • Interest for delayed TDS payment

Mismatch of TDS credit for the NRI

While PAN is preferred, if the NRI does not have a PAN, alternative details such as Tax Identification Number (TIN), passport number, or country of residence may be provided. However, absence of PAN may result in higher TDS rates.

Yes, Form 27Q can be revised to correct errors related to deductor details, deductee information, challan data, or TDS amounts by filing a corrected return.

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