To increase the efficiency of the tax collection process in India, the government introduced TCS or tax collected at source. Under this mechanism, a seller collects taxes from a buyer when the latter purchases something. Upon collection, the seller is liable to deposit the TCS amount with the Income Tax Department within a given time limit.
Furthermore, as per Section 206C of the Income Tax Act, all government and non-government collectors and deductors have to submit Form 27EQ at the end of every quarter. The purpose of Form 27EQ is to act as a statement providing information regarding the tax collected at source. A failure to do so can lead to a hefty penalty.
Keep reading further to learn more about Form 27EQ guidelines.
Filing correct forms with proper details within the due date can be a daunting task. Fortunately, only the following individuals and entities have to submit Form 27EQ, specifying details of tax collected at source from buyers:
Contents of Form 27EQ are categorised into these sections:
Here are the key characteristics of Form 27EQ:
You can download Form 27EQ by following these easy steps:
Step 1: Visit NSDL’s official website.
Step 2: On the top navigation bar, scroll to ‘Download.’ Select ‘E-TDS/E-TCS’ from the dropdown menu.
Step 3: Next, choose ‘Quarterly Returns’ and ‘Regular.’
Step 4: As a new page appears, scroll down to the ‘Forms’ column and select ‘Form 27EQ.’
Step 5: The form will open up, and in the top right corner, you have the option to download or print it.
Government and corporate tax collectors and deductors need to submit Form 27EQ while filing TCS returns quarterly. Due dates for submission are as follows:
|1||April 1 to June 30||July 31|
|2||July 1 to September 30||October 31|
|3||October 1 to December 31||January 31|
|4||January 1 to March 31||May 31|
As one submits Form 27EQ while filing TCS returns, any delay in submission leads to the same penalty that is levied when there’s a delay in filing TCS returns. Thus, the penalty is as follows:
Form 27EQ plays a crucial role in ensuring that tax collection and deposition are successful. It not only provides information regarding tax collected but is also vital for TCS returns filing. Thus, collectors should go through the above-mentioned details to ensure the successful submission of Form 27EQ before the due date.
Ans: The roles played by Form 27Q and 27EQ are quite similar. However, the former has to be filled by NRIs or foreigners as a declaration of TDS returns. Meanwhile, the latter is relevant for quarterly TCS statements submitted by the government and corporate collectors.
Ans: TDS and TCS are tax collection mechanisms under the Indian taxation system. The former is where a deductor collects taxes from a deductee’s source of income while making a payment to them. Meanwhile, the latter is where a seller collects taxes when they sell something to a buyer.
Ans: TAN is a ten-digit alphanumeric code issued by the Income Tax Department of India. However, only those persons that deduct or collect taxes on behalf of the government are liable to possess a TAN.
Ans: Yes, a taxpayer can claim TCS refunds in a financial year. Buyers with an annual income below Rs. 2.5 lakh have no tax liability; they do not have to pay TCS as well. In this case, they can claim TCS refunds.
Ans: If a seller fails to collect TCS on time, the person will be liable to pay interest of 1% per month till the collection of tax. The seller might suffer from extra penalties if they are unable to file TCS returns and submit Form 27EQ on time.
Disclaimer: Mutual Fund investments are subject to market risks, read all scheme-related documents carefully.
This article has been prepared on the basis of internal data, publicly available information and other sources believed to be reliable. The information contained in this article is for general purposes only and not a complete disclosure of every material fact. It should not be construed as investment advice to any party. The article does not warrant the completeness or accuracy of the information, and disclaims all liabilities, losses and damages arising out of the use of this information. Readers shall be fully liable/responsible for any decision taken on the basis of this article.
|Section 194IB||Section 44AA||Section 80E|
|Section 195||Section 80EEA||Section 80DD|
|Section 80CCC||Section 80GG||Section 80 G|
|Section 54F||Section 1941A||Section 10|
|Section 194Q||Section 192||Section 269SS|
|Section 80DDB||Section 44AD||Section 194C|
|Section 194A||Section 194H||Section 80D|
|Section 80C||Section 80C, 24(b), 80EE & 80EEA||Section 234A|
|Section 50C||Section 80C||Section 80EEA|
|Section 194B||Section 194J||Section 206C|
|Section 80CCG||Section 80 EEB||Section 24Q|
|Section 40b||Section 194C||Section 54EC|
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