Form 27 – Importance and meaning

Form 27EQ Meaning 

 
To enhance the efficiency of the tax collection process for goods in India, the government introduced TCS (Tax Collected at Source). This system requires sellers to collect taxes from buyers when they make a purchase. Once collected, the seller is responsible for depositing the TCS amount with the Personal Tax Division within a timeframe.

Additionally, as per Section 206C of the Income Tax Act, both government and non-government collectors and deductors are required to submit Form 27EQ at the end of each quarter.  

Form 27EQ serves as a statement providing information about tax collected at source. Failure to do so can result in penalties. 

Read on to explore details about the rules pertaining to Form 27EQ. 

Table of Content

• Form 27EQ Meaning
• Who is Required to Submit Form 27EQ?
• Form 27EQ Sections
• Key features of Form 27EQ for TCS Returns
• Simple Steps to Download Form 27EQ
• Form 27 EQ: Penalty for Late Submission
• Frequently Asked Questions

Who is Required to Submit Form 27EQ? 

Ensuring accurate form submissions with all details within the specified deadline can be a task. Fortunately, only the individuals and entities are required to submit Structure 27EQ, which includes providing details of tax collected at the source from buyers: 

• Government deductors and collectors 
• Non-government or corporate deductors and collectors 

Form 27EQ Sections 

The categories in Form 27EQ are divided into the following further sections: 

Section 1 

Under this section of the form a deductor is required to fill in the following details: 

• TAN (Tax Deduction and Collection Account Number) 
• PAN (Permanent Account Number) 
• Fiscal year 
• Assessment year 
• Indicate whether the submission of statements has taken place. 
• If yes, provide a receipt number for the statement. 

Section 2 

A person responsible for gathering information should fill in the following details in this section: 

• Name of the person who is a collector 
• Division or branch (if applicable) of the collector 
• Private information such as Address, Contact Details and Email ID 

Section 3 

The individual in charge of collecting charges should provide the following details in this section 

• Name 
• Address 

Section 4 

This part requires information regarding the collection of taxes at the source and the amount deposited with the Central Government. Please provide the following details: 

• Collection code 

• Amount of tax collected at source 
• Education Cess (Amount in general) 
• Overcharge amount 
• Amount collected through interest charged 
• Additional charges/amount, if any 
• Total sum of all mentioned amounts i.e. total tax deposit 
• BSR code (Bank Serial Number) 
• Date when the total tax amount was deposited 
• Check number or demand draft number 
• Transaction voucher or challan serial number  
• Please also mention whether TCS (Tax Collected at Source) is recorded through book entry. 

Section 5 

Lastly as a taxpayer, please specify details about tax collected and paid in the annexure provided with this form. They also need to provide signatures. 

Key features of Form 27EQ for TCS Returns 

The characteristics of Form 27EQ are as follows: 

• The purpose of this form is to inform the Income Tax Department about the tax collected at source and deducted by the seller. 
• Section 206 of the Income Tax Act establishes the guidelines and governs the submission of Form 27EQ. 
• Government and corporate deductors and collectors are required to file Form 27EQ on a quarterly basis. 
• Having a Tax Deduction and Collection Account Number (TAN) is mandatory for individuals submitting this form. 
• Government deductors should mention ‘PANNOTREQD’ in the form. On the other hand, non-government deductors need to provide PAN details in the form. 

Simple Steps to Download Form 27EQ

 
To download Structure 27EQ, you can follow these given steps: 

Step 1: Visit the website of NSDL. 

Step 2: Navigate to the ‘Download’ option on the menu bar. Choose ‘E TDS/E TCS’ from the menu. 

Step 3: Select ‘Quarterly Returns.’ Then choose ‘Regular.’ 

Step 4: On the page scroll down to the ‘Forms section. Click on ‘Structure 27EQ.’ 

Step 5: The form will open up. In the right corner you will find options to download or print it. 

Form 27 EQ: Penalty for Late Submission 

Late submission of Structure 27EQ incurs a penalty to that imposed for delaying TCS return filing. Afterwards the penalty is as follows: 

• Form 27EQ under section 234E 

If form 27EQ under Section 234E is filed late, a daily penalty of Rs. 200 will be imposed until the authority or deductor submits the returns along with this form (the total penalty cannot exceed the TCS amount). 

• Failure to file Form 27EQ under Section 271H 

If this form is not submitted by the deadline, an Assessing Officer may decide to impose a penalty. The penalty can range from Rs. 10,000, to Rs. 1,00,000 depending on the seriousness of the offense. 

Frequently Asked Questions; 

What is form 27Q for TDS return?  

Answer: Form 27Q is a declaration or return that includes details of Tax Deducted at Source (TDS) on payments made to Non-Resident Indians (NRI) and foreigners excluding salary payments. It should be filed quarterly before the date. 

What are the consequences if a seller fails to collect TCS?  

Answer: If a seller fails to collect TCS on time they will be liable to pay 1% interest per month until the tax is collected. Additionally, there may be penalties if they fail to file TCS returns and submit Structure 27EQ on time. 

Is Form 27EQ filed quarterly? 

Answer: Yes, Form 27EQ is submitted on a Quarterly basis.