Form 27C: Declaration of exemption under TCS

Hiral Vakil

TDS

TDS Returns & Forms

Last updated on January 27th, 2023

A tax collected at source is a concept where the seller of the goods collects tax from the buyer of the goods on specified transactions. Here, If a buyer of the goods does not wish to pay the same then they can submit Form 27C to the seller so that they can get an exemption from the deduction of tax. Such specified goods include scrap materials, timber, tendu leaves, and so on.

What is Form 27C?

Form 27C is a declaration form for non-deduction of TCS by the buyer of goods to the seller. However, As per the Income Tax rule, the seller of the goods must collect tax from the buyer.

To avoid this a declaration in Form 27C can be made by the buyer who is a resident of India and uses purchased goods for the manufacturing, processing, or production of goods/ article. Buyer gives a declaration, in duplicate in Form number 27C.

A copy of the declaration has to be given to the person collecting the tax. Also, the person collecting this declaration form has to submit a copy to the authorities concerned on or before the 7th of the following month.

Eligible Buyers

Any buyer who receives goods or rights to receive goods in any sale, auction, tender, or through any other mode is eligible for an exemption except for the following:

Central Government
State Government
Public Sector Companies
Trade Representation, Embassy, and other Consulates.
Any Club

Eligible Sellers

Here are the admissible sellers:

Central Government
State Government
Companies
Firms
Cooperative societies
Local authorities
Individuals or HUF under section 44AB

Details required to file Form 27C

This form has two sections that need to be filed in and signed by both the buyer and seller. The following are the details required:

Part I: Contains information about Buyers such as Name, PAN, Address, Contact Details, List of goods procured, and the purpose towards which the purchase is intended.
Part II: Contains information of Seller such as Name, PAN, TAN, Address, Contact Details, and Date on which declaration is furnished.

Apart from the above information, the sale receipt of the goods also needs to be furnished.

FAQs

When Form 27C is not used?

If the goods are being purchased for the purpose of trading then you can not file this form.

What is the difference between Form 27C and 27D?

Form 27C is a certificate for non-deduction of TCS by a buyer of the goods to the seller. Whereas 27D is a certificate for Tax collected at Source u/s 206 of the Income Tax Act.

Is there a fee for filing Form 27C?

No, there is no fee for filling out this form.

Got Questions? Ask Away!

Yesha says:

26/04/2021
Hey @HarshitShah

HarshitShah:

Is there any interest or penalty for non or late filing of Form 24Q & Form 26Q?

Yes, in case you have not deposited TDS by the due date, the following penalties might be applicable:
- Interest (if you do not deposit the TDS amount in time)
- Late filing fee (if you do not file by the deadline)
- Penalty (if TDS is not filed within one year of the due date)
Hope this helps!
Yesha says:

26/04/2021
Hey @HarishMehta

HarishMehta:

Could you also tell me what are form 24, 27 and 27E for?

Form 24, 27 and 27E are forms to file TDS/TCS returns:
- Form 24 is to file TDS return detailing Salary Payments
- Form 27 is to file TDS return detailing Foreign or NRI payment other than salary
- Form 27E is to file TCS returns
Hope this helps!
Nireka says:

05/05/2021

Hi @KrishnaAgarwal

Form 27C (under Section 206C)

Form 27C declaration shall be furnished in duplicate to the person who is responsible to collect tax (i.e Seller.) Then, seller shall deliver to the Chief Commissioner or Commissioner, one copy of the declaration referred to on or before the seventh day of the month next following the month in which the declaration is furnished to the seller.

Learn by Quicko – 27 Jan 23

Form 27C: Declaration of exemption under TCS | Learn by Quicko

Form 27C is a document that can exempt payment from TCS. This form can be used subject to an authorization of the Income Tax Department.

Estimated reading time: 3 minutes
Nireka says:

09/08/2021

Hey @taxpayer, you can file your Income-tax return can claim the tax refund for any excess tax credits available to you.
If your total taxable income is below the basic exemption limit then you won’t have any tax payable.
You can check the total tax credits available to you in your Form 26AS

Learn by Quicko – 1 Oct 21

Form 26AS - View & Download Tax Credit & Annual Information Statement...

Form 26AS is a consolidated tax credit statement with TDS, Taxes Paid details. The CBDT has announced the changes in Form 26AS Annual Information Statement

Estimated reading time: 10 minutes
Nireka says:

23/08/2022

@Muskan_Balar @Bharti_Vasvani can you help here?
Bharti_Vasvani says:

23/08/2022

Hello @abhaykk90,

As per section 194IB of the income tax act, if you’re liable to deduct TDS on rent paid, the rate applicable will be 5%.

Hope this helps!
Shrutika_Shah says:

11/10/2022
Hi @t_bovee,

Here are answers to your various questions
1. TDS has to be deducted every month at 5%.
2. Deducted TDS has to be deposited within 30 days from the end of the month in which TDS is deducted.
3. Penalty of 1.5% per month or part thereof will be levied in case of a late deposit of TDS.
However, you can file TDS return 26QC within 30 days from the end of the financial year.

Here’s a read on What is Form 26QC? Who needs to file form 26QC? - Learn by Quicko for your reference. Hope this helps.
Shrutika_Shah says:

12/10/2022

Hi @t_bovee

It would not be possible for us to tell you the mismatch of amounts, without seeing the documents.
However, for expert assistance with your taxes, here’s how you can Book a MEET.
Shrutika_Shah says:

13/10/2022

Hi @paliya_hitesh

Here’s read on Form 26Q: TDS on other than Salary - Learn by Quicko for your refrence.
paliya_hitesh says:

13/10/2022

Thank you for the reference @Shrutika_Shah