27Q TDS – Foreign Payments, Due Date & Filing Rules

Key Insights 

1. Form 27Q must be submitted each quarter by the specified due date to maintain compliance and prevent penalties.

2. All NRI payments, including capital gains and sports income, should be reported when completing Form 27Q TDS.

3. The process of 27Q TDS involves three steps: deducting TDS, making the payment online using Form 27Q TDS, and filing the return electronically.

Entities that pay 27q form for tds return, Non-Residents or domestic companies must file Form 27Q TDS online accurately. This guide outlines your obligations and provides steps to help you meet the form 27Q TDS return due date and avoid penalties.

The 27Q TDS return is a mandatory quarterly summary of tax deducted at source from specified payments. It serves as the official record of all deductions made from payments to NRIs and companies with form 27q tds online. Accurate filing is essential for adherence.

Example:

Last quarter, I processed a ₹5,00,000 payment to a foreign vendor and deducted ₹50,000 as TDS. I promptly completed form 27q for tds return and submitted it through the form 27q tds online portal. 

I also scheduled the 27q tds online payment for the deducted tax and noted the 27q tds return due date, the 31st of the following month, to ensure timely filing.

The Payer and Payee in Form 27Q TDS

Two parties are involved in TDS payments under Section 195. Here is the list of the payer which shows you below:

Payer: The payer is the individual, organisation, or HUF responsible for making payments to the NRI. TDS must be deducted before the payment is made.

Payee: The payee is the recipient of the payment. For Form 27Q TDS, the payee’s residential status must meet the eligibility criteria under Section 6 of the Income Tax Act.

If you want accurate identification and TDS deduction by the payer for eligible NRI or corporate payees, it is essential for effective Form 27Q submission.

Bonus Tip: In column 708, Government DDOs should enter the amount remitted by the PAO, CDDO, or DTO. Other deductors or payers should write the exact amount deposited using the challan.

What types of payments are covered by Form 27Q?

Payers must deduct TDS from payments to NRIs at prescribed rates, depending on the payment type. The following payments are covered under Form 27Q.

• Income generated from investment in the securitisation trust
• Interest income from an Indian company involved in a specific business
• Payment of the provident fund balance, taxable in the hands of the employee
• Income from long-term capital gains (LTCG) under Section 112 or 112A
• Income from short-term capital gains (STCG) mentioned in Section 111A
• Other amounts payable to non-residents
• Income of Foreign Institutional Investors (FII) from securities
• Interest income on Government Securities and individual bonds
• Payments to non-resident sportsmen and sports associations
• Income relating to non-resident units
• Payments concerning offshore fund units
• Income from Indian company shares or foreign currency bonds
• Interest income from the infrastructure debt fund

Identifying which NRI payments, such as dividends and sports royalties, require Form 27Q TDS is essential for maintaining compliance.

What is The Form 27Q TDS Return Due Date?

TDS deducted from salary must be paid by the seventh of the following month. For deductions in March, the due date is April 30 of the next financial year. 

The 27Q TDS return due dates for each quarter are as follows.
 

Add these four important credentials and 27q tds online payment to your financial calendar to help you stay on track and avoid penalties when filing payments for non-residents.

How to File TDS with Form 27Q?

The buyer needs to deduct TDS from payments made to NRIs. The sales agreement between the buyer and the NRI seller should include the deduction details, payment information, and the TDS rate.

When TDS is deducted, the buyer should deposit it using a challan. The buyer also needs to complete Form 27Q and file the TDS return before the quarterly deadline.

To file Form 27Q online, visit the official income tax website and enter the required details like payment information, TDS amount, and PAN.

Conclusion

Filing your 27Q TDS return correctly helps you avoid penalties. Keep track of the quarterly deadlines, check which payments are covered, and use the official 27Q TDS online portal to file and pay on time.

FAQs

Accidentally filed Form 26QB instead of 27Q for an NRI property purchase? Here’s what you should do next. 

If you used Form 26QB for an NRI property purchase instead of Form 27Q, log in to the TRACES portal right away to start a correction request for Form 26QB. Update any incorrect details and claim a refund if needed. At the same time, pay the correct TDS using Form 27Q and file its quarterly return. 

Will the NRI seller face trouble claiming TDS credit?  

An NRI seller could have trouble claiming TDS credit if the buyer makes mistakes with the deduction, which may delay repatriation. However, you can usually claim the credit by filing an Indian Income Tax Return (ITR) to show your actual tax liability. After the 2025 budget change, getting a nil TDS certificate will be harder, so filing an ITR is necessary for refunds. 

What is the difference between Form 27A and 27Q?  

Form 27Q is the quarterly e-TDS return used for reporting tax deducted on payments made to non-residents, such as interest, royalties, and fees for technical services. Form 27A is a required summary sheet that must be submitted with the e-return (24Q, 26Q, 27Q, or 27EQ), whether filing physically or electronically. It checks that the totals for tax deducted and the amount paid match those in the electronic file.

Explain TDS in a simple manner?  

Tax Deducted at Source. It means that when someone pays for certain things like salary, rent, interest, or professional fees, they take out tax before giving the rest to the person receiving the money. The person who makes the payment sends this tax straight to the government. This helps collect taxes early and prevents tax evasion. 

Do you need a Tax Deduction and Collection Account Number (TAN) for Form 27Q?

Yes, the person or business making the payment must have a TAN to file Form 27Q TDS.