TCS Return Form 27EQ: Guide to Filing, Due Dates & Compliance

Introduction

What is Form 27EQ?

Form 27EQ is a quarterly return filed for reporting Tax Collected at Source (TCS) in India. Under the provisions of the Income Tax Act, TCS is collected by the seller from the buyer at the time of sale of certain specified goods or services. The tax collected is then deposited with the government, and the details must be reported using Form 27EQ.

Purpose of Form 27EQ

Form 27EQ serves as both a return statement and challan for the TCS deposited. It ensures proper reporting of tax collection and compliance with Section 206C of the Income Tax Act, 1961.

Key Information Captured in Form 27EQ

Collector’s Details: Name and details of the person or entity responsible for collecting TCS.
PAN of Collector: The Permanent Account Number of the tax collector.
PAN of Deductee: The Permanent Account Number of the buyer from whom tax is collected.
TCS Transaction Details: Information about the nature and value of transactions subject to TCS.
TCS Amount Collected: Total amount of tax collected during the quarter.
Payment (Challan) Details: Information regarding the challan used to deposit TCS with the authorized bank

Due Dates for Filing Form 27EQ

Form 27EQ must be filed quarterly, with the following due dates:

Quarter	Period Covered	Due Date
Q1	April – June	31st July
Q2	July – September	31st October
Q3	October – December	31st January
Q4	January – March	31st May

Why is Form 27EQ Important?

Form 27EQ is a crucial compliance document under Section 206C of the Income Tax Act, 1961. It is used to report and deposit Tax Collected at Source (TCS) on specified goods and services.

Key Reasons to File Form 27EQ

✅ Compliance with TCS Provisions

Sellers collecting TCS are legally required to file Form 27EQ.
It ensures tax collected from buyers is properly declared and remitted to the government.

✅ Efficient Tracking of TCS

Helps the Income Tax Department monitor TCS collections.
Provides details of transactions, collected amounts, and the involved parties.

✅ Prevention of Tax Evasion

Filing ensures transparency in TCS-related transactions.
Makes it harder for entities to underreport or misuse collected taxes.

✅ Enables Buyers to Claim TCS Credit

Buyers can claim credit for TCS paid while filing their income tax returns.
Form 27EQ acts as valid documentation for claiming this credit.

✅ Avoidance of Penalties

Delayed or non-filing can result in fines and interest.
Timely submission helps avoid legal and financial repercussions under Sections 234E and 271H.

Who is Required to File Form 27EQ?

Corporate Entities
Government Departments
Other Sellers collecting TCS on notified goods and services under Section 206C

How to Select the Correct Collectee Code

Use the following chart to determine the appropriate code based on the deductee’s legal status:

Collectee Code	Type of Deductee
01	Company
02	Government
03	Firm
04	Individual / HUF
05	AOP (Association of Persons) / BOI (Body of Individuals)
06	Local Authority

Choosing the correct collectee code is essential to ensure accurate classification, avoid mismatches, and facilitate smooth processing of TCS returns.

Features of Form 27EQ

Purpose

Form 27EQ is used for reporting and remitting Tax Collected at Source (TCS) on specific goods and services.
It ensures compliance with Section 206C of the Income Tax Act, 1961.

Filing Frequency

Filed quarterly (every three months).

Information Required

TAN (Tax Deduction and Collection Account Number)
PAN (Permanent Account Number) (except for government deductors)
Financial Year and Assessment Year
Details of TCS Collected:
- Collection code
- Amount of TCS
- Education cess
- Surcharge
- Interest charged (if applicable)
Payment Details:
- BSR Code (Bank and Branch Code)
- Date of deposit
- Challan serial number or cheque/DD details

Filing Method

Online filing through the TRACES portal of the Income Tax Department.

Key Sections of Form 27EQ

Section 1: Basic Information (TAN, PAN, financial year, assessment year)
Section 2: Details of Deductor/Collector
Section 3: Declaration
Section 4: Details of Tax Payment
Section 5: Annexure (Details of tax collected and paid)

Steps to File Form 27EQ

Step 1: Register on the TRACES Portal

Visit the TRACES Portal (https://www.tdscpc.gov.in) and register using TAN and PAN to get your login credentials.

Step 2: Gather Required Information

TAN, PAN, Financial Year, Assessment Year.
TCS Collection Details (Collection code, amount, cess, surcharge, interest).
Tax Payment Details (BSR code, date of deposit, challan/cheque details).

Step 3: Validate and Digitally Sign the Form

Use the File Validation Utility (FVU) to check for errors.
Digitally Sign the form using a Digital Signature Certificate (DSC).

Step 4: Submit Online via TRACES Portal

Log in using your User ID and Password.
Go to “File Returns”, upload Form 27EQ, and submit.
You will receive a File Reference Number (FRN) after successful submission.

Step 5: Make TCS Payment (if not done already)

Pay the TCS to the government through designated banks.
Keep a record of the challan details for reference.

Contents of Form 27EQ

Collector’s Details:
- Name and Address of the Collector
- TAN of the Collector
Deductee PAN:
- Permanent Account Number of the buyer from whom TCS is collected.
TCS Transaction Details:
- Nature of Payment
- Transaction Amount
- TCS Rate
- TCS Amount
Challan Details:
- BSR Code (Bank and Branch Code)
- Challan Serial Number
- Date of Deposit
- Amount Deposited
Other Information:
- Assessment Year
- Quarter for which the return is filed
- Collectee Code (the type of buyer from whom TCS is collected)

Collectee Codes

Form 27EQ requires a Collectee Code to categorize the type of buyer. Some common codes are:

Company: Code 01
Central Government: Code 02
State Government: Code 03
Local Authority: Code 04
Statutory Body: Code 05
Partnership Firm: Code 06
Individual/HUF: Code 07
AOP/BOI: Code 08

Tip: Always verify the PAN of the collectee before choosing the correct code.

Penalties for Non-Payment and Late Filing

Late Filing:
- A penalty of ₹200 per day under Section 234E until the return is filed (up to the amount of TCS due).
Failure to Collect or Deposit TCS:
- Interest of 1% per month if TCS is not collected.
- Interest of 1.5% per month if TCS is collected but not deposited.
Incorrect Filing (Section 271H):
- A penalty between ₹10,000 and ₹1,00,000 for incorrect details in Form 27EQ.
Prosecution (Section 276B):
- In extreme cases, failure to pay TCS may lead to imprisonment for 3 to 7 years and a fine.

Common Errors to Avoid While Filing Form 27EQ

Incorrect PAN or TAN: Verify PAN details for both the collector and deductee.
Mismatched TCS Amount: Ensure the TCS amount in the form matches the amount deposited.
Late Payment of TCS: Timely payment avoids interest charges.
Skipping FVU Validation: Use the File Validation Utility (FVU) to ensure there are no errors before submission.
Missing Challan Details: Include accurate BSR codes and challan numbers.
Filing Without Digital Signature (DSC): A valid DSC is mandatory for submission

Frequently Asked Questions (FAQ) about Form 27EQ

1. What is the deadline for filing Form 27EQ, and what are the consequences of late filing?

The deadline for filing Form 27EQ depends on the quarter in which TCS is collected:

Quarter ending June 30th: Due July 31st
Quarter ending September 30th: Due October 31st
Quarter ending December 31st: Due January 31st
Quarter ending March 31st: Due May 31st

Consequences of Late Filing:

A penalty of ₹200 per day for the initial delay under Section 234E.
After a certain period, a reduced penalty of ₹5 per day applies for subsequent delays.
Interest on unpaid TCS is charged at prevailing rates.

2. Can Form 27EQ be filed electronically, and what is the process for online submission?

Yes, Form 27EQ can be filed electronically through the TRACES portal. Here’s how you can do it:

Register on TRACES:
- Use your TAN and PAN (except for government deductors) to register and receive your User ID and Password.
Prepare the Form:
- Gather the necessary details like TAN, PAN, financial year, TCS collected, and payment details. You can download and fill the form offline or use the online utility.
Validate the Form:
- Use the File Validation Utility (FVU) on the TRACES portal to check for errors. Correct any discrepancies, if found.
Sign and Submit:
- Obtain a valid Digital Signature Certificate (DSC) and digitally sign the form.
- Log in to TRACES, select “File Returns”, choose Form 27EQ, upload the signed form, and submit.
- After submission, you will receive a confirmation and a File Reference Number (FRN)

3. What information and details are required to be filled in Form 27EQ for accurate TCS reporting?

To ensure accurate reporting, you need to provide the following information:

Basic Information:
- TAN, PAN (for both deductor and deductee, except government deductors), financial year, and assessment year.
Deductor/Collector Details:
- Your name, address, and contact details.
Declaration:
- A declaration confirming the accuracy of the information and compliance with provisions.
Tax Payment Details:
- BSR Code, Date of Deposit, Challan/Cheque/DD details.
Annexure:
- Breakdown of the TCS collected and paid for each transaction, including details like collection code, amount, cess, surcharge, and interest

4. Are there any exemptions or thresholds for certain transactions in relation to TCS and Form 27EQ?

Yes, certain transactions may be exempt from TCS, and there are thresholds for others. For instance:

TCS is not applicable on:
- Car purchases below ₹10 lakhs
- Immovable property purchases below ₹50 lakhs
- Timber purchases below ₹2 lakhs

For detailed exemptions and thresholds, you can refer to the Income Tax Department website or consult a tax professional

5. What is the penalty for non-compliance or incorrect filing of Form 27EQ?

The penalties for non-compliance or incorrect filing of Form 27EQ can include:

A fine of up to ₹10,000 for non-filing or late filing.
Interest on unpaid TCS at prevailing rates.
Disallowance of expenses related to transactions where TCS was not correctly collected or deposited.
In severe cases, prosecution under the Income Tax Act

6. Can a taxpayer make corrections or amendments to a filed Form 27EQ, and what is the process for doing so?

Yes, corrections can be made by filing a revised Form 27EQ within the filing deadline for the relevant quarter. The steps are:

Clearly mark the form as a revision.
Provide details of the original submission.
Late filing penalties will still apply to the revised form

7. Where can businesses and individuals find guidance or support for understanding and filing Form 27EQ for TCS returns?

You can access helpful resources from:

Income Tax Department website: For comprehensive information on TCS provisions, Form 27EQ instructions, and FAQs.
TRACES portal: Offers user manuals and tutorials for online filing.
Tax Consultants: Professional guidance is available for complex situations or specific queries.
Chartered Accountant Associations: They offer workshops, publications, and guidance on TCS compliance

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