Form 27Q – NRI TDS Returns

Form 27Q is a TDS (Tax Deducted at Source) return or statement that captures the details of TDS deducted on payments other than salary made to Non-Resident Indians (NRIs) and foreign individuals. This TDS return must be filed quarterly, on or before the due date. The form provides a record of payments made to NRIs and the corresponding TDS deducted by the deductor.

Payer and Payee

The responsibility of deducting TDS lies with the payer, irrespective of whether they are an individual, HUF, firm, or any other entity. The payee is a non-resident whose status is defined as per the provisions of the Income Tax Act.

Payments Covered under Form 27Q

Any deductor making specified types of payments to NRIs or foreign residents is required to deduct TDS at the prescribed rates. The types of payments covered under Form 27Q include:

• Payments to non-resident sportsmen and sports associations
  
• Other sums payable to non-residents
  
• Income earned by foreign institutional investors from securities
  
• Income related to units held by non-residents
  
• Interest earned on individual bonds and government securities
  
• Payments related to units of an offshore fund
  
• 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 specific business activities
  
• Payment of accumulated provident fund balances taxable in the hands of the employee
  
• Income distributed by investment funds to unitholders
  
• Income earned from investments in securitization trusts
  

Form 27Q ensures that all applicable TDS is correctly recorded and reported for payments made to non-residents, providing transparency and compliance with Indian tax laws.

Details Required for Filing Form 27Q – NRI TDS Return

To file Form 27Q for TDS return, the following details are required:

Sl.No	Entity	Required Details
1	Deductor	PAN, TAN, Name, Address, and Contact Information
2	Responsible Person	Name, PAN, Address, and Contact Details
3	Challan	Challan Serial Number, BSR Code, TDS, Surcharge, and Education Cess Paid
4	Deduction	Deductee Name, PAN, Amount Paid or Credited, TDS Deducted and Deposited

Note: If the NRI does not have a PAN, additional information is required, including Tax Identification Number (TIN), Permanent Address, Country of Residence, Email, and Contact Details.

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Due Dates for Filing Form 27Q

The TDS deducted on salary must be paid by the 7th of the following month, except for March, which is due by 30th April. Form 27Q, being a quarterly return, must be filed by the following dates:

Quarter	Period	Due Date
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

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Sections of Form 27Q

Form 27Q consists of three main sections:

1. Statistics of Vouchers
   This section captures all transactions and classifies them as included, excluded, or uncertain.
   
   Included Transactions may consist of:
   
   • Booking entries with or without TDS deduction
     
   • TDS deduction entries
     
   • Advance payments made to parties
     
   • TDS adjustment entries for government entities
     
   • Entries related to TDS reversals or adjustments for escalations/de-escalations
     
2. Excluded Transactions include:
   
   • Entries where TDS is not applicable
     
   • Voucher types such as Payment, Contra, Inventory, Sales Order, Purchase Order
     
   • Debit Notes or Credit Notes with no TDS implications
     
   • Payroll Vouchers or Optional Vouchers
     
3. Uncertain Transactions occur when there is insufficient information in either Masters or Transactions to classify them as included or excluded.
   
4. Deduction Details
   This section details the type of deduction under which each included transaction falls. Categories include:
   
   • Deduction at Normal Rate
     
   • Deduction at Higher Rate
     
   • Lower Rated Taxable Expense
     
   • Zero Rated Taxable Expense
     
   • Under Exemption Limit
     
   • PAN Not Available
     
5. It displays the taxable value, assessable value, and tax deducted for each transaction.
   
6. Payment Details
   This section provides a summary of all TDS payments made (actual or deemed) for the current period. Non-TDS payments are excluded. The section is divided into:
   
   • Included Transactions
     
   • Excluded Transactions

Procedure to Deduct TDS for NRIs

TDS should be deducted at the time of making the payment to a Non-Resident Indian (NRI). The details of the TDS deducted, including the applicable rate, must be clearly mentioned in the agreement or sale deed between the NRI seller and the buyer.

The buyer is responsible for depositing the TDS using a challan on or before the 7th of the month following the month in which the TDS was deducted.

After depositing the TDS, the buyer must file the TDS return by submitting Form 27Q. TDS returns are required to be filed quarterly, within 15 days from the end of each quarter.

After filing TDS returns in Form 27Q, the buyer can issue the TDS certificate (Form 16A) to the NRI seller. This certificate must be provided within 15 days from the due date for filing quarterly TDS returns.

Updates in Form 27Q: Reporting Payments to Partners under Section 194T
Form 27Q has been updated to include reporting under Section 194T, which covers payments made to non-resident partners. The revised form now features a new section for 194T along with the existing Section 195. This change is intended to simplify the TDS reporting process for payments to non-residents and ensure that all applicable deductions are properly recorded and reported.

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