All About Form 27EQ TCS Return

A statement of return is required to be filed in Form No. 27EQ for the Tax Collected at source by the seller. Before jumping to the provisions related to TCS return, it is important to understand the concept of TCS and how it is different from TDS.

What is Tax Collected at Source (TCS)?

TCS, as the name suggests, refers to the collection of direct/ income tax while selling the prescribed products at prescribed rate. (Table for reference is given below):

Difference between TDS & TCS:

While TDS is deduction of tax while making payments, TCS is collection of tax while making sales. The question that instantly comes in our mind when we read about both TDS and TCS at the same time is that - Do sellers collect TCS and buyers/ beneficiaries deduct TDS while making payments/ discharging liabilities simultaneously? The answer is no. TDS and TCS are not made on a single transaction. The transactions/ events that come under the TDS are different than the transactions that are covered under the provisions of TCS. The provisions of TCS are governed by the section 206C of the Income Tax Act, 1961.

List of specified goods sale of which attracts collection of tax at source (TCS) along with TCS Rate:

S. No. Particulars Applicability criteria TCS Rate When to collect TCS

1. Alcoholic Liquor for human consumption TCS only if these specified products are used for trading purposes and not for manufacturing, processing or producing articles/ things or for generation of power. 1% At the time of debiting the amount payable by the buyer/ lessee/ licensee or at the time of receipt, whichever is earlier
2. Tendu Leaves 5%
3. Timber 2.5%
4. Forest produce other than Timber & Tendu leaves 2.5%
5. Scrap 1%
6. Minerals being coal or lignite or iron ore 1%
7. Lease/ License or transfer of any right or interest in any Parking Lot TCS only when it is for the purpose of business. 2%
8. Lease/ License or transfer of any right or interest in any Toll Plaza 2%
9. Lease/ License or transfer of any right or interest in any Mine/ Quarry 2%
10. Sale of Motor vehicle When consideration for sale of motor vehicle is more than Rs. 10 Lakhs 1% At the time of receipt

NOTE: Compliance in nexus with the purchase of specified goods for the purpose other than trading:

Form no. 27C:

In case the specified products (i.e. alcoholic liquor, scrap, minerals, tendu leaves, timber & other forest produce) are used for manufacturing, processing or producing articles/ things or for the purpose of power generation and not for the trading purposes, the resident buyer is required to furnish a declaration to the collector of tax in Form no. 27C. The collector is further required to submit the same to the department on or before the 7th day of the following month.

Compliances with TCS:

Due dates for deposit of TCS for the AY 2020-21:

For TCS by an office of the Government: 

S. NO	PARTICULARS	DUE DATE
1	With Challan (Challan No./ ITNS 281)	7th  day of next month (including the payments to made for the month of March)
2	Without Challan	Same day on which tax is collected

For TCS by Others:

S.NO	PARTICULARS	DUE DATE
1	With Challan (Challan No./ ITNS 281)	7th  day of next month (including the payments to made for the month of March)
2	Without Challan	Not allowed

For the payments made by way of challan (i.e. ITNS 281), statement is required to be filed in FORM NO. 27EQ for every quarter.

Content of Form No. 27EQ:

The content of TCS Return in form 27EQ includes the following:

1. Tan Deduction & Collection Account Number (TAN)
2. Permanent Account Number (PAN)
3. Financial Year for which the return has been filed
4. Category of the collector of tax
5. Details of Collector: Name, TAN & Address
6. Details of Collectees: Name, PAN & Address
7. Details of Tax collected at source and paid to the government along with the details of challan by way of which the payment was made
8. Party wise breakup of TCS in separate annexure for each party along with the total amount collected from each of such party.
9. Verification statement signed by the Collector of Tax.

Due dates for filing for TCS RETURN in Form 27EQ FOR AY 2020-21:

QUARTER	QUARTER PERIOD	DUE DATE
1st Quarter	1st Apr’19 to 30th Jun’19	15th July 2019
2nd Quarter	1st Jul’19 to 30th Sep’19	15th October 2019
3rd Quarter	1st Oct’19 to 31st Dec’19	15th January 2020
4th Quarter	1st Jan’20 to 31st Mar’20	15th May 2020

Preparation of return FORM NO. 27EQ:

Return can be prepared online by using NSDL e-Gov e-TDS/TCS Return Preparation Utility (RPU) that can be downloaded free of cost from the website of TIN.

Prepared return has to be submitted to any of the TIN-FCs established by NSDL e-Gov.

Interest attached with FORM NO. 27EQ:

Particulars	Interest Rate
If not COLLECTED	1% per month or part of the month from due date of deduction to actual date of deduction
If not DEPOSITED	1.5% per month or part of the month from the actual date of deduction to the actual date of payment

Penalty attached with FORM NO. 27EQ:

Section	Minimum penalty	Maximum Penalty
Late filing of 27EQ (Penalty u/s 234E)	@200 per day until filing of return	Maximum penalty can be equal to the amount of TDS deducted
Non- filing of 27EQ Penalty u/s 271H*	10,000/-	1,00,000/-

* No penalty will be charged under 271H if following conditions are fulfilled–

● TDS is deposited to the government

● Late filing fees and interest (if any) is also deposited

● Return is filed before expiry of 1 year from due date

TCS Certificate- FORM NO. 27D:

Every collector of tax has to furnish a certificate in Form No. 27D to collectee within 15 days of filing of return.

Due dates for issue TCS Certificate in Form 27D FOR AY 2020-21:

QUARTER	QUARTER PERIOD	DUE DATE
1st Quarter	1st Apr’19 to 30th Jun’19	30th July 2019
2nd Quarter	1st Jul’19 to 30th Sep’19	30th October 2019
3rd Quarter	1st Oct’19 to 31st Dec’19	30th January 2020
4th Quarter	1st Jan’20 to 31st Mar’20	30th May 2020

For the payments made by way other than challan, a return is required to be filed in form No. 24G to the authorised authority on or before the dates given in the table below:

S.NO	PARTICULARS	DUE DATE
1	For months of Apr’19 to Feb’20	15th day of next month from the end of relevant month.
2	For the month of Mar’20	30th Apr’20

SUMMARY OF FORMS DISCUSSED ABOVE:

S. No	Form No.	Remarks
1	Form No. 27C	A declaration form to be furnished by a buyer of the specified goods to the seller in case such goods are to be used for the purpose other than trading.
2	Form No. 27EQ	A statement of return to be furnished quarterly by the collector of tax for the tax collected and deposited by way of challan (ITNS 281) to the Government exchequer.
3	Form No. 27D	A certificate to be issued by collector to the collectee as an acknowledgement for the tax collected and deposited.
4	Form No. 27G	A statement of return to be furnished monthly by the government collector of tax for the tax collected and deposited without challan.