Form 27C

Form 27C
Purpose To claim exemption on TCS of specific goods as per the conditions of Section 206C (1) of IT Act, 1961
Who Can Use It? Buyers and sellers of the certain goods
Eligibility You can only purchase the goods for production, processing, or manufacturing of further items

Form 27C is a document to apply for exemption of Tax Collected at Source (TCS). This is used by buyers and sellers of specific goods as per the Income Tax Act, 1961. According to Section 206C (1), taxes on goods are collected from the buyer. So, TCS applies to taxation for the sale of goods. On meeting certain norms, if you fill and submit Form 27C, you can save on Tax Collected at Source.

In this post, we will discuss Form 27C features, goods you can procure for tax exemption, eligible buyers and sellers, and frequently asked questions.

Features of Form 27C

Here are the details:

Goods Eligible for Tax Exemption

The eligible goods on which you can claim tax exemption are:

Buyers Eligible to Use Form 27C

Any entity or person eligible to obtain rights to receive goods or the goods itself in auction, sale, tender, or other channels except the ones stated below:

Sellers Eligible to Use Form 27C

Here are the admissible sellers:

Frequently Asked Questions about Form 27C

Here are the Form 27C FAQs:

1. How to Submit Form 27C?

The buyer submits Form 27C through a declaration that the good purchased is not for trading but intended for manufacturing or processing. The buyer has to submit this declaration to the entity collecting the tax (seller). The seller has to submit a copy of this declaration to the concerned authorities (Chief Commissioner or Commissioner). The submission of the documents should happen before or on the 7th day of the next month.

2. When to Deposit the Tax Amount?

The seller has to deposit the tax amount in a week from the last working day of the previous month.

3. When to Deposit the Form for Returns?

The seller, who deposits the amount of tax, should deposit Form 27EQ for returns every quarter.

4. What is Form 27EQ?

This is a quarterly statement. It contains information on TCS at the end of each quarter. The rules pertain to Section 206C of the IT Act 1961. Government deductors and collectors as well as corporate deductors and collectors have to submit this form for TCS return.

5. What is the Relation between Form 27D, Form 13, and Form 27C?

All of these forms are for Tax Collected at Source. Form 27D is for the certificate of TCS. Form 13 is for a rebate on this tax. And Form 27C is for exemption on TCS on specific goods as listed in the Income Tax Act.