Purchasing a property from a NRI in India entails tax compliance that is different from the usual ones. One of the major requirements is filing Form 27Q if you are doing TDS (Tax Deducted at Source) under Section 195 of the Income-Tax Act while making the payment to the NRI seller.
My Startup Solution is explained to you through all the procedures to teach you how to file Form 27Q properly for your quarterly TDS return.
If a resident Indian purchases property from a non-resident Indian (NRI), the Tax Deducted at Source (TDS) must be deducted in accordance with Section 195 of the Income Tax Act. The purpose of this provision is to make sure that the authorities receive the tax from the income of non-residents who have earned it in India. TDS for NRI property purchases is significantly higher and is based on capital gains unlike property purchases from resident sellers where TDS is normally 1%.
Missing this step can lead to penalties, interest, and legal notices.
Form 27Q is a TDS return that is filed on a quarterly basis and it is meant to disclose the TDS amount that is deducted on the payments made to non-residents, and consequently, also to NRIs. In terms of real estate transactions, it keeps a record of:
Without filing Form 27Q, the TDS payment is considered incomplete, even if tax has been deposited.
Filing Form 27Q is not optional, it is mandatory for the begetting of legal awareness and protection of the buyer and the seller.
We at My Startup Solution routinely support customers who get notices only because Form 27Q was not sent or sent improperly.
TDS rates vary based on the nature of capital gain.
In many cases, total TDS may go up to 23%–28%, which makes accuracy extremely important.
To file Form 27Q, you need the following:
You also need details of the tax payment challan:
This section explains the entire process in simple steps, suitable even for first-time buyers.
PAN is mandatory for TDS deduction. Without PAN, higher TDS rates apply, creating unnecessary financial burden.
TDS must be calculated on capital gains, not on property value, if a lower deduction certificate is obtained. Otherwise, it is calculated on the total sale value.
TDS must be deducted at the time of payment or credit, whichever is earlier. This includes advance payments.
Deposit the deducted TDS online through the income tax portal using Challan 281 within 7 days from the end of the month in which TDS was deducted.
After depositing TDS, Form 27Q must be prepared and filed quarterly.
Information Required in Form 27Q
After uploading Form 27Q, verification is done using DSC or EVC. Once verified, the return is successfully filed. After successful upload, you’ll receive a unique acknowledgement number for that quarter’s filing.
After you successfully file Form 27Q, generate and issue Form 16A to the NRI seller. Form 16A must be issued within 15 days from the due date of the TDS return filing for the quarter. This certificate is important for the NRI seller’s tax records.
Every TDS return has a strict deadline. For Form 27Q:
|
Quarter |
Quarter Period |
Due Date for Form 27Q |
|
Q1 |
April – June |
31st July |
|
Q2 |
July – Sept |
31st Oct |
|
Q3 |
Oct – Dec |
31st Jan |
|
Q4 |
Jan – Mar |
31st May |
Always file before these dates to avoid penalties.
The leading cause of mistakes is lack of clarity most of the time.
If these errors are not made, then one will not have to deal with legal troubles, wasting time and money.
The penalties are imposed very strictly by the Income Tax Department.
Assistance from experts will eliminate the problems in their entirety.
At My Startup Solution, we provide end-to-end assistance for:
Our expert team guarantees 100% accuracy, timely filing and relaxing experience for both buyers and sellers.
The submission of Form 27Q for TDS relating to the purchase of NRI property is a mandatory requirement which needs to be done cautiously every quarter. It consists of correctly entering the data, making a proper TDS deposit and accurately preparing the documents with the help of NSDL tools.
My Startup Solution can support you with the whole process from start to finish, ensuring that you do not miss any deadlines. If you require expert assistance, get in touch with My Startup Solution via phone at +91-7081220800.
Form 27Q is a quarterly TDS return that reports deductions on payments made to NRIs. The property transaction, TDS deducted and tax deposited with the Income Tax Department are all recorded.
The buyer of the property is the one that deducts TDS and files the Form 27Q. The NRI seller is not responsible for filing this form in any way.
Indeed, Form 27Q is obligatory whenever there is a TDS deduction on payments to an NRI, including property sale transactions in India.
Form 27Q is to be submitted every quarter. The deadlines are 31 July, 31 October, 31 January and 31 May, depending on which quarter you are in.
A penalty of ₹200 per day applies for late submissions and apart from that, one can also encounter further penalties and receive notices from the Income Tax Department.
Yes, the first step before making a TDS deduction and filing Form 27Q is to apply for and obtain a Tax Deduction Account Number (TAN).
Certainly, a correction return may be filed to correct any errors in the PAN details, challan information or transaction data that have been identified.
Yes, the filing of Form 27Q is always performed online through authorized portals and the system of the Income Tax Department.
Details required are PAN of the buyer and seller, TAN, value of the property transaction, TDS amount, challan number and payment date.
My Startup Solution offers total support in TDS calculation, making payment of challan, Form 27Q filing, corrections and compliance help. For expert assistance, call +91-7081220800.
"Choosing 'My Startup Solution' for my startup's accounting needs was one of the best decisions I made. The team's dedication to accuracy and their personalized approach to my financial situation set them apart. They go above and beyond to ensure I'm well-informed and compliant, allowing me to focus on my business's growth."
"The team at 'My Startup Solution' has been a true partner in my entrepreneurial journey. Their insightful financial guidance and meticulous attention to detail have helped me navigate complex financial matters seamlessly. With their support, I can confidently steer my startup toward success, knowing that my financial matters are in capable hands."
