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Tax Collected at Source (TCS) is a system where a seller of certain goods collects taxes from the buyer. Now, if the buyer is not liable to pay any taxes and wishes to inform the seller about the non-deduction of taxes, he/she can submit Form 27C of the Income Tax Act. In this case, the list of specific goods includes timber, scrap materials, tendu leaves, etc.
Keep reading to learn how to file Form 27C, its applicability, the documents required and more.
As per the Income Tax Act, Form 27C is a declaration form for non-deduction of Tax Collected at Source (TCS) by the buyer of goods to its seller. Rules state that the seller of goods needs to collect taxes from the buyer. However, if the buyer is not liable to pay TCS, he/she can file Form 27C.
However, he/she needs to be an Indian resident and use all goods purchased to manufacture, produce or process articles or goods. Moreover, the buyer has to provide a duplicate declaration with Form 27C.
Form 27C submission allows a total exemption in TCS. The buyer has to submit a duplicate form by declaring that all purchased goods are used for manufacturing or processing purposes and not for trading.
You must note that this declaration needs to be submitted to the seller, who has to provide a copy to concerned authorities before or on the seventh day of the next month.
Following is a list of sellers, goods and buyers who fall under the applicability of Form 27C:
Goods | Seller |
Indian Made Foreign Liquor (IMFL) - alcoholic liquor for consumption by human | Central Government |
Timber acquired via forest lease | Local Authorities |
Tendu leaves | State Government |
Timber acquired by any means except for forest lease | Statutory Authorities or Corporations |
Any forest produce other than Tendu or Timber | Co-operative Societies |
Leasing or licensing of toll plaza, parking area | Sole Proprietary Firm or Partnership Firm |
Scarp (scrap or waste from mechanical working or manufacturing of materials that is not usable due to cutting up, breakage, wear or any other reason) | Public or Private Companies |
Quarrying and mining | Hindu Undivided Family (HUF) |
Form 27C is required to determine the buyer's eligibility for TCS exemption. The buyer tells the seller that the transaction comes within the appropriate parameters, allowing them to claim the exemption. This document is tangible proof, safeguarding the buyer's rights and encouraging tax transparency.
When submitting Form 27C, it is critical to include correct information. Buyers must carefully fill in all details like their name, address, PAN, purchased goods and utilities. Remember to crosscheck all the information before submitting. Any mistake in filling out this form will require you to repeat this process all over again. Furthermore, it may involve additional steps.
You can download Form 27C by following some simple steps. They are:
Now you can download the form either as a fillable form (word document) or PDF form as per your requirement.
Note: Only a buyer can download Form 27C to fill up details under the section "Part I- Details of the buyers". As a buyer, you have to fill in all the details and hand over the filled form to the seller for further proceedings.
Now, if you are a seller, you need to know how to file Form 27C online. Follow the steps given below:
Here are the documents required for filing Form 27C:
In case you are a buyer, understanding how to file Form 27C is important while claiming exemptions from Tax Collection at Source. But, if you are a seller of the specified goods mentioned above, you must collect the declaration form from your buyer and fill in your details properly to facilitate the exemption.
Also, downloading and filing Form 27C is simple, since you can locate, fill out, and file the form by visiting the income tax department's official website.
Click here to download Form 27C in PDF format.