Form 27C – Importance and Meaning

Form 27C Definition 

Form 27C, in accordance with the Income Tax Act, is a declaration form used by buyers of products to inform sellers that they are not required to deduct Tax Collected at Source (TCS).  

A tax collected at the source is the concept where the seller collects the tax from the buyer of the goods on the specified transactions. Here, if a buyer of the goods does not wish for the deduction of tax can submit Form 27C so that they can get an exemption from the deduction of tax. 

Let’s dive in and learn more about Form 27C. 

Here, we will discover: 

• What is Form 27C?
• Requirements Associated with Form 27C
• Form 27C Download
• How to Fill Form 27C?
• Key Factors Required to File Form 27C

What Is Form 27C? 

Form 27C is a document used by the buyer of goods to declare that they will not deduct Tax Collected at Source (TCS) from the payment to the seller. According to the Income Tax rule, the seller is obligated to collect tax from the buyer. 

In order to prevent this, the buyer, who is a resident of India and utilizes the purchased commodities for the purpose of manufacturing, processing, or producing goods/articles, might make a declaration in Form 27C. The buyer provides a duplicate declaration in Form number 27C. 

The person collecting the tax must be provided with a duplicate of the declaration. Additionally, the individual responsible for gathering this declaration form must deliver a duplicate to the relevant authorities no later than the 7th day of the subsequent month. 

Requirements Associated with Form 27C 

The buyer of goods can only use Form 27C if the products being acquired are intended for the production, manufacturing, or processing of additional goods, articles, or things. If the products are being purchased for trading purposes, Form 27C cannot be utilized for tax exemption. The eligible purchasers, vendors, and categories of products that fall within the scope of tax collection at source and can be processed with Form 27C are outlined below: 

• Permissible vendors 
• Potential purchasers who meet the necessary criteria for merchandise 
• Eligible purchasers Merchandise 

Form 27C Download  

To obtain Form 27C, you can download it by following a set of straightforward instructions. The following items are: 

• Access the authorized website of the Income Tax Department of India at incometaxindia.gov.in. 
• Select the option labelled “Downloads”. 
• Select the option “Income Tax Forms” from the drop-down menu. Below is a comprehensive compilation of all pertinent forms that a taxpayer may require. 
• Utilize the search bar to locate Form 27C. 

You now have the option to download the form in either a fillable format (Word document) or a PDF format, depending on your preference. 

How to Fill Form 27C? 

If you are a seller, it is essential for you to possess the knowledge of how to electronically submit Form 27C. Proceed by adhering to the following instructions: 

• Access the official income tax site at “www.incometax.gov.in” and log in using your TAN as the user ID. 
• Proceed to the electronic filing option. 
• Navigate to the section labelled “Income Tax Forms” and choose the option “File Income Tax Forms”. 
• Choose the “Persons not dependent on any Source of Income” option and navigate to Form 27C. 
• Complete all the particulars in Part I (comprising all the particulars of the buyer) and Part II (comprising all the particulars of the seller). 
• Kindly scan the Form 27C Part I that you have received from the buyer and upload it in the attachment area of Part II.  

Once you have completed entering all the necessary details, you can proceed to submit Form 27C and avail deductions for Tax Collected at Source (TCS). 

Key Factors Required to File Form 27C 

The following documents are necessary for submitting Form 27C: 

• The buyer’s information must include their name, status, PAN or Aadhar card number, mobile number, email id, type of products, nature of business, and the intended purpose for using the commodities. 
• The date of issuance of the Form 27C declaration. 
• The payment date refers to the specific day that the buyer’s account is charged for the outstanding amount, or when the individual settles the due amount in cash, by submitting a check, or through a draft. 

Notarized copies of the buyer’s Form 27C declaration. The individual must clearly indicate the intended use of the purchased items, excluding any commercial trading reasons. 

There you go!  

That’s everything you must know about Form 27C.