Form 27Q

Form 27Q & Form 15CB Filing – Common Errors & Penalties 2025- Simplified

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Dealing with foreign payments? Then you’re likely familiar with Form 27Q and Form 15CB under the Indian Income Tax Act.

But small errors in filing can lead to hefty penalties, TDS mismatches, or even payment blocks by banks.

What is Form 27Q?

Form 27Q is a TDS return for non-residents (including NRIs and foreign companies).
It must be filed if you deduct TDS while making any payment to a foreign party.

Examples:

  • Freelancers hiring foreign consultants
  • Companies paying for software subscriptions
  • Payments for services or interest outside India

It contains:

  • PAN of payee
  • TDS amount deducted
  • Nature of payment
  • Date of deduction
  • Challan details

Quarterly filing is mandatory (like Form 26Q for residents).

What is Form 15CB?

Form 15CB is a CA Certificate under Section 195.
It is needed when a foreign remittance is taxable and TDS is deducted.

Purpose? To certify:

  • Nature of payment
  • Whether it’s taxable in India
  • Applicable TDS rate (with or without DTAA)
  • Compliance with FEMA & Income Tax rules

Step-by-Step to File Form 15CB Online

Step 1: Chartered Accountant Login

Step 2: Navigate to Form 15CB

  • Go to:
    e-File → Income Tax Forms → File Income Tax Forms
  • Search and select Form 15CB
  • Click “File Now”

Step 3: Fill Form 15CB

Provide the following information:

A. Remitter Details

  • Name, PAN, Address
  • Residential status

B. Remittee (Foreign Party) Details

  • Name, Country, Address
  • Tax Residency (as per DTAA)

C. Payment Details

  • Nature of payment (royalty, interest, consultancy, etc.)
  • Invoice amount and currency
  • Purpose code (as per RBI)

D. Taxability & DTAA Info

  • Whether the payment is taxable
  • TDS rate under the Income Tax Act
  • TDS rate under DTAA (if lower)
  • Relevant DTAA Article
  • Whether PAN of remittee is available

E. TDS Info

  • TDS amount
  • Challan details (number, date, amount)
  • Payment date

Step 4: Sign Using DSC

  • Attach your Digital Signature Certificate (DSC)
  • Click Submit

After filing, the form is visible to the remitter in their login for linking with Form 15CA.

This form is uploaded on the Income Tax portal by your Chartered Accountant.

When is Form 15CB + 15CA Required?

Type of Payment15CB Required?15CA Part
Payment > ₹5 lakh, taxable in IndiaYesPart C
Payment < ₹5 lakh, taxableNoPart A
Payment exempt or not taxableNoPart D (Self-declaration)
Under DTAA with TRCYesPart C + 15CB with DTAA benefit

Common Errors in Form 27Q & 15CB Filing

  1. Wrong PAN or missing PAN of foreign party
  2. Incorrect TDS section used (e.g., 195 vs 194E)
  3. Mismatch in TDS rate or nature of income
  4. Filing TDS under 26Q instead of 27Q
  5. Not uploading Form 15CB on portal before remittance
  6. Not mentioning correct DTAA article / country
  7. 15CB filed but no 27Q filed (or vice versa)

What are the Penalties?

MistakePenaltySection
Late filing of 27Q₹200/daySection 234E
Incorrect or non-filing₹10,000 – ₹1,00,000Section 271H
Not deducting TDS at all30% to 100% of taxSection 201
Wrong 15CB infoCA may face penalty & client may get notice–

Difference: 234E vs. 271H

SectionWhat it Charges ForNature
234ELate filing of TDS returnFee (Compulsory)
271HIncorrect info or non-filingPenalty (Discretionary by AO)

Bank may also refuse your foreign payment if 15CB or 15CA not filed correctly.

How to Avoid These Issues?

  • Hire a qualified CA familiar with foreign TDS
  • Get Tax Residency Certificate (TRC) of foreign party if DTAA applicable
  • Always file 15CB before sending money
  • Cross-verify 27Q with 15CB & remittance documents
  • Keep records of invoices, contracts & bank advice slips

Final Words

Many businesses and freelancers make avoidable mistakes in Form 27Q and Form 15CB, leading to TDS defaults, delayed remittances, or IT notices.

But if you’re a little careful, or work with the taxgiveindia.com consultant, you can stay fully compliant and avoid all penalties.

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