27Q and 27EQ are forms used by the Indian Income Tax Department for the submission of TDS (Tax Deducted at Source) returns.
Form 27Q is used for the submission of TDS returns on payments made to non-resident Indians or foreign companies. This form is filed quarterly. It includes details of the deductor (the person making the payment), the deductee (the non-resident Indian or foreign company receiving the payment), and the details of the TDS deducted.
Form 27EQ is used for the submission of TDS returns on payments made to non-residents (other than non-resident Indians) or foreign companies. This form is filed quarterly. It includes similar details as Form 27Q, but for non-residents other than non-resident Indians.
These forms are used to report the TDS deducted and remit the TDS amount to the Income Tax Department. It is important to accurately fill out these forms and submit them within the specified due dates to comply with tax regulations.
Form 27Q
Form 27Q TDS return is a type of form that Indian companies or business individuals fill out when they make payments to non-resident Indians as salary. It is mandatory to deduct TDS (Tax Deducted at Source) from such payments. Through this form, the entity making the payment provides the government with details of the amount deducted as tax against the non-resident Indian. This return is submitted quarterly, and its primary purpose is to ensure the smooth process of tax collection.
Form 27Q involves Two Sides: one is the Payer, and the other is the Payee.
Payer: The payer refers to the individual, organization, Hindu Undivided Family (HUF), etc., making the payment to a Non-Resident Indian (NRI). The payer is responsible for deducting TDS (tax deducted at source) before transferring the payment to the NRI.
Payee: The payee is the individual who receives the income. In the context of Form 27Q, the payee is the NRI who is the recipient of the payment. The residential status of the payee is determined as per Section 6 of the Income Tax Act.
TDS is deducted on the entire amount being paid. The final amount is increased because of the addition of education cess and surcharge. The rates at which TDS is levied corresponding to the reason for payment are as follows:
| Section | Payment Type | Rate of TDS |
| 194E | Payment made to Sports association or an NRI sportsman | 20% |
| 194LB | Payment made as to interest on the infrastructure debt fund | 5% |
| 194LC | Payment made as to interest by any Indian company or trust for the money borrowed in foreign currency as a loan or long-term bonds | 5% |
| 195 | Payment made on the investment made by a non-resident Indian citizen | 20% |
| Payment made to non-resident Indian citizen for investments on assets other than mentioned among the specified assets in the form of long-term capital | 10% | |
| Payment made to non-resident Indian citizen for unlisted shares and securities of a non-public company | 10% | |
| Payment made to non-resident Indian citizen which forms their income through long-term capital gains as mentioned under section 112A | 10% | |
| Payment made to non-resident Indian citizen which forms their income through short-term capital gains as mentioned under section 111A | 15% | |
| Any other payment made to non-resident Indian citizen which forms a part of their income as long-term capital gains. | 20% | |
| Payment made in the form of interest by the government of India or an Indian company on the amount borrowed as loan or debt | 20% | |
| Royalty paid to the non-resident Indian citizen by the Indian government or Indian company for the transfer of copyright or other such agreement. | 10% | |
| Fees paid for availing technical services by the Indian Government or Indian company | 10% | |
| Any other form of payment | 30% | |
| 196B | Payment made to an offshore fund | 10% |
| 196C | Payment to non-resident Indian citizen in the form of Indian Company’s Shares or foreign currency bonds | 10% |
| 196D | Payment made to foreign investors in the form of securities | 20% |
Time Schedule for Form 27Q
| Period | Duration of Period | Due Date of Quarter |
| Quarter 1 | April 1 to June 30 | Jul-31 |
| Quarter 2 | July 1 to September 30 | Oct-31 |
| Quarter 3 | October 1 to December 31 | Jan-31 |
| Quarter 4 | January 1 to March 31 | May-31 |
Form 27EQ TCS
Primarily for TCS returns, Form 27EQ is a quarterly certificate that contains details of the Tax Collected at Source or TCS under Section 206C of the Income Tax Act, 1961.
Under this section, the seller has to collect TCS from the buyer at the time of making the sale and furnish the quarterly TCS details while filing the TCS returns Form 27EQ every quarter before the due date to avoid penalty.
The difference between TDS and TCS
TDS is tax deducted at source while making a payment. On the other hand, TCS is tax collected at source while making a sale.
Due dates to file TCS returns
| Quarter | Due date |
| 1st April to 30th June | 31st July |
| 1st July to 30th September | 31st October |
| 1st October to 31st December | 31st January |
| 1st January to 31st March | 31st May |
How to prepare return:
If you are manually preparing and filing the Form 27Q return, the first step is to download the offline utility provided by the department.
To download it, go to eTDS.
After preparing the data, you should verify your complete data and ensure that all the data in the return is accurate and matches the required format. If all the things are correct you can generate an FVU file through an offline utility and the same FVU file will be uploaded at Income Tax Portal.
The process of upload FVU file at ITD portal is
Visit Income Tax Department Portal
- You need to go to the Income Tax Department portal and Login with the TAN.
- After logging in, you need to go to “e-File > Income Tax Forms > File Income Tax Forms” on the portal.
- After that click on 27Q, File Now
- Now click on, Let’s get Started > Select the form, Year, Quarter and Return Type after that attached your FVU zip file which you have been generated through Utility.
- After attaching the FVU zip file, it’ll validate and if it’s validated successfully then click on Proceed to e-Verify option and submit and verify your return.
- After filing, receipt will be generated there you can download it at the same time.
So, this is the process if you are filing the return through the department portal. It’s quite a lengthy process. First, you need to download the department’s utility. In that, you have to enter your Challan and TDS entries. Then, you have to validate that data. If everything is correct, you generate the FVU file from there. After that, you manually upload that FVU file to the Income Tax Department portal after logging in. This entire process requires manual intervention, consumes a significant amount of time, and there’s also a chance of making mistakes.
But if you are using ExpressTDS, it becomes much easier for you to prepare and file your return with over a hundred validations.
Now, let’s talk about how using Express TDS can make your work easier and be beneficial for you.
Data Maintain
If we work manually, we don’t have a proper way to maintain data. Anytime, for any reason, if we need a report or have to provide data to a client, it will take a considerable amount of time to prepare it. This is because we don’t have the data properly maintained in any systematic way. However, if we use Express TDS, all the data will be properly maintained in one place.
Complete CloudBase Solution
The benefit of the software being cloud-based is that all the data is stored in the cloud. This means there is no chance of data loss, and you won’t encounter space-related issues on your system. Another advantage of being cloud-based is that you can work from anywhere, on any system, and most importantly, you can work simultaneously on different systems at the same time.
Simplify TDS Hassles, No Java with ExpressTDS – Cloud-Driven, Tech-Worry-Free
One common issue in working of TDS filing is related to Java, but with ExpressTDS software, you don’t need Java installation. You will not face any technical issues related to Java, SQL, etc. while using Express TDS software. Additionally, the system configuration is not required as ExpressTDS is a cloud application.
User-Friendly Interface
Talking about the interface and working of ExpressTDS, it’s so user-friendly that anyone, even someone working on TDS for the first time, can easily understand and efficiently use the software.
Time and Effort Saving
The tasks we are doing manually, be it data preparation or return filing, all of these consume a lot of our time. However, by using ExpressTDS, we can save a significant amount of time and reduce the effort required in manual working.Data Validation
The reason for many demands often lies in not conducting PAN verification or compliance checks. We input the data, generate the FVU, and upload it, without receiving any messages or errors from the utility or portal. However, later, we receive notices, and it becomes apparent that due to PAN or other reasons, the deduction should have been different, and we made an error. Express TDS provides you with a solution for this. It generates error reports and Health Analysis Reports before return filing. If a mistake is made, it can be corrected at that moment, and during the subsequent FVU generation, the ExpressTDS flags any potential mistakes. ExpressTDS generates the FVU file only after passing through a series of hundred-plus validations.
Indeed, there are numerous reasons why using ExpressTDS can make TDS Filing work significantly easier, saving both Time and Effort.
Now, we will see how we can prepare the return with 100% accuracy using ExpressTDS and upload it to the portal within minutes.
Create the return first
After creating the return, the next page that opens requires us to enter TDS details. Here, you have two options: you can either manually enter the details one by one, or you can use Excel to add multiple entries at once.
In Excel, you can not only make Challan entries and TDS entries but also adjust the Challan with TDS entries. The benefit of this is that you won’t need to do extra or separate work. Complete all your work in this Excel file and then import it into the software. After that, check the TDS Computation and Health Analysis report before uploading the return.
The software automatically fetches the challan details, so you are not required to add them manually or import them separately.
Now, if we talk about Mapping Challan and TDS entries, there are three methods here.
- The first option, as we saw above, is that when we prepare data in Excel, we can simultaneously map TDS entries with the corresponding Challan. There won’t be a need for manual working in the software.
- The second method allows us to map the Challan while entering TDS details. The Challan details can be auto-fetched in the software during TDS entry, and a list of Challans will be displayed. We can then select and map the Challan during the TDS entry process.
- The simplest option for mapping is the Drag and Drop facility. In this mapping window, all Challans (Unconsumed & Consumed) are displayed on the right side, and all TDS entries are shown on the left side. You can easily drag and drop the TDS entry you want to map onto the respective Challan. Just pick up the TDS entry and drop it onto the Challan you want to map it with. This is a very straightforward method, allowing you to map multiple TDS entries in a single step.
So far, we have completed all our work. In the next step, we receive essential reports such as TDS Computation, Summary of Challan to Deductee Transaction Mapping, Compliance Check, and Health Analysis Report. If we have made any mistakes during our working, they are identified on this page. We can see issues like unverified PAN or Challan, name mismatches, late fee and interest calculations, short deduction, or higher deduction on this page.
TDS Computation
In TDS Computation, we get to see the total tax liability, interest and late fee liability, summary of challans, consumed and unconsumed amounts of the challan, as well as the mapped and unmapped amounts for TDS entries.
Health Analysis Report
In the Health Analysis Report, we can see any unverified PANs, invalid or name-mismatched PANs. Similarly, unverified or mismatched challans, instances of higher deduction and short deduction, as well as interest and late fee details, are displayed. We have the option to share this report with anyone via email.
After checking all these details, now we need to proceed to file the return. If there is any unverified PAN or Challan, the software will alert you at this stage as well. To generate the FVU file, you need to click on “Generate FVU.” There’s no need to manually download the CSI file here because the software fetches it automatically. If there are any errors, they will be displayed on the same page. With a single click, you can navigate to the error point and correct it.
Once the FVU is generated, you have the option to download it. Upon clicking the download option, the FVU file is generated, and you can open it to find all the necessary files. Finally, by clicking “Proceed for e-filing,” you will be redirected to the department portal. The entire process will happen automatically, and your return will be submitted.
During TDS entries, you receive Multiple Reports that are quite helpful. These include Transaction-wise, Deductee-wise, Section-wise, and Conflict reports.
Transaction-wise
Deductee-wise
Section-wise
· Conflict-Report:
Here, there are several reports above that will be quite helpful in our working.
We can perform tasks in both ways, whether it’s using the department’s official utility or Express TDS. However, if we use Express TDS, we can save a significant amount of time and effort. Moreover, by efficiently managing data, we can accomplish our tasks with greater accuracy.
ExpressTDS has some unique features that set it apart and make it superior to any other software or utility.
Completely Cloud base solution
Express TDS is a comprehensive cloud-based solution that allows you to file all types of TDS or TCS related submissions. You can use it from anywhere, at any time, and simultaneously on multiple systems. This provides a convenient and efficient way to manage your TDS or TCS filings.
Java less Utility
The common issue faced in TDS working is related to Java. We often need to uninstall, reinstall, or update Java on our systems repeatedly. However, with ExpressTDS, we never encounter Java-related issues because it is, in a sense, a Java-less utility. Therefore, we never face problems associated with Java, and the software is not affected by the system configuration, ensuring a smoother experience.
Simplifying Master Creation
In ExpressTDS, there are various options available for creating a client master. You can add a single client to the software, or you have the flexibility to add multiple clients at once. One method is through Bulk Import, where you can add multiple clients from an Excel file in a single operation. Another approach is the Auto Scan feature. This feature scans your system, identifying any text files or TDS files present, and then displays them in the software. You can conveniently select and add single or multiple clients at once using this method.
Notice & Orders
If a client receives a notice or demand, we usually check our emails or log in to the portal to stay updated. However, many times, we may miss these notifications, and we fail to respond within the given time, leading to increased liabilities. To avoid facing such issues, ExpressTDS includes a feature for Notices & Orders. If you have added a client to your software and they receive any notice or demand, ExpressTDS will promptly display the notice or demand in the software. This ensures that we can respond in a timely manner and prevent any additional liabilities.
Single Page Dashboard
In ExpressTDS, all the prepared returns, returns prepared outside the software, Notices & Orders, outstanding demands, single and bulk PAN and compliance checks, challans, liabilities, top deductees data for all forms, TAN insights, certificate management, and many other features are conveniently available on a single page. You don’t need to navigate to different pages; you get an overview of that party’s information on a single page.
Historical Data Auto Fetch
When we create a master for a party in the software, it’s not just about creating the master information. The software also automatically fetches some historical data for that party.
Bulk PAN Verification and Compliance check
Many times, notices or demands arise because we prepare returns without completely verifying them. Therefore, in our software, we have provided the option to perform PAN verification and compliance checks as soon as you open a party’s profile. This allows you to verify all PAN numbers and their compliance status while preparing the return, minimising the chances of receiving any notice or demand. Unlike other utilities or portals that do not provide alerts for this, ExpressTDS displays these features during your work and also alerts you when generating FVU. By utilising this feature, you can significantly reduce the likelihood of receiving any notices or demands.
Challan Mapping through Drag & Drop Facility
The simplest option for mapping is the Drag and Drop facility. In this mapping window, all Challans (Unconsumed & Consumed) are displayed on the right side, and all TDS entries are shown on the left side. You can easily drag and drop the TDS entry you want to map onto the respective Challan. Just pick up the TDS entry and drop it onto the Challan you want to map it with. This is a very straightforward method, allowing you to map multiple TDS entries in a single step.
TDS Computation and Health Analysis Report
In TDS computation, we can view tax liability, interest, and late fee liability with calculations, along with mapped and unmapped entries. The Health Analysis Report provides details such as unverified, invalid, mismatched PANs, verified and unverified challans, short and higher deductions, and similar information. It serves as a validation report, indicating whether everything is correct, allowing you to proceed with filing. If everything is in order here, you can proceed with the filing process.
Data Validation
The software operates with over a hundred validations. If you make any mistakes, the software will promptly identify and display them, allowing you to correct the errors immediately and proceed with your tasks.