1. Legal Requirement
- Section 206C(5): Mandates that every seller/collectormust issue a TCS certificate (Form 27D) to the buyer (collectee) as proof of tax collected.
- Rule 37D: Specifies the format, content, and timelinesfor issuing Form 27D.
2. Key Features of Form 27D
| DETAIL | DESCRIPTION |
| Issued By | Seller/collector (with valid TAN). |
| Issued To | Buyer (collectee) whose PAN is recorded. |
| Contents |
- Seller’s & buyer’s PAN/TAN.
- Amount collectedas TCS.
- Challan/BSR detailsof TCS deposit.
- Quarterly statement number(from Form 27EQ). |
| Validity | Acts as proof for buyer to claim TCS credit in ITR. |
3. Due Date for Issuance
- Within 15 daysfrom the due date of filing the quarterly TCS return (Form 27EQ).
- Example: For Q1 (April–June), Form 27EQ is due by July 15→ Form 27D must be issued by July 30.
4. Compliance Steps
- Collect TCS: At the time of sale/payment receipt.
- Deposit TCS: By the 7th of the next month.
- File Form 27EQ: Quarterly return by the 15th of the next month.
- Issue Form 27D: Within 15 daysof filing Form 27EQ.
5. Penalties for Non-Compliance
| DEFAULT | CONSEQUENCE |
| Late Issuance | ₹500/day (max. TCS amount) under Section 272A(2). |
| Incorrect Details | ₹10,000–₹1,00,000 penalty (Section 271H). |
| Non-Issuance | Buyer may be denied TCS credit in ITR. |
6. Special Cases
- Duplicate Certificate: Issued if buyer loses Form 27D (must be marked “DUPLICATE”).
- Pre-2010 Certificates: Followed old rules (now obsolete).
7. Recent Updates (2025)
- Digital Issuance: Form 27D is auto-generated on the TRACES portalpost-filing of Form 27EQ.
- AIS Integration: TCS credits appear in buyer’s Annual Information Statement (AIS)for verification.
Key Takeaways
✔ Form 27D is mandatory for all TCS transactions under Section 206C.
✔ Issued within 15 days of quarterly TCS return filing.
✔ Buyers must verify TCS credits via Form 26AS/AIS.
✔ Penalties apply for delays/errors in issuance.
