# Form 27Q and Form 144 for TDS on Payments to Non Residents (2026)

> Source: https://krystal7.com/insights/tds-returns-form-27q-non-resident-payments
> Publisher: Krystal7 Consultants (Krystal7 Innovations Private Limited), Gurugram, India
> Author: CA Nandini
> Published: 06 Jan 2026; updated 24 Oct 2026
> Summary: Form 27Q became Form 144 from tax year 2026-27, with quarterly due dates of 31 July, 31 October, 31 January and 31 May for non resident TDS.

*Written by CA Nandini Hasija, Krystal7 Consultants. Last updated 23 October 2026.*

## AI Overview Summary

- Form 27Q is the quarterly TDS statement for payments to non residents. From tax year 2026-27 it is Form 144, filed under section 397(3)(b) of the Income Tax Act, 2025 and rule 219.
- Form 144 is due on 31 July, 31 October and 31 January for the first three quarters, and on 31 May after the tax year for the January to March quarter.
- A late statement costs INR 200 a day under section 427, capped at the TDS. Filing over one month late can also draw a section 461 penalty of INR 10,000 to INR 1,00,000.
- The deductor issues Form 131 (old Form 16A) from the TRACES portal within 15 days after each Form 144 due date. A payee without a valid PAN gets no Form 131.
- Correction statements are now allowed only within two years from the end of the tax year in which the original statement was due, including old Form 27Q statements under the Income Tax Act, 1961.

**Form 27Q is the quarterly statement of tax deducted at source (TDS) on payments other than salary to non residents and foreign companies. For quarters up to 31 Mar 2026 it was filed under section 200(3) of the Income Tax Act, 1961 and rule 31A. From tax year 2026-27 it is Form 144, under section 397(3)(b) of the Income Tax Act, 2025 and rule 219. The due dates are 31 July, 31 October, 31 January and 31 May.**

This page is for Indian subsidiaries, branches and other payers that send money to a parent, vendor or lender abroad. It covers who files, what goes in, due dates, Form 131, corrections, fees and penalties, the old to new section map, and a worked example. Rupee amounts use Indian grouping, so INR 1,00,000 is one lakh.

## What is Form 27Q and what replaced it?

Form 27Q is the TDS statement for payments to three kinds of payee. They are a non resident other than a company, a foreign company, and a resident but not ordinarily resident. Rule 219 of the Income Tax Rules, 2026 renamed it Form 144 from 1 Apr 2026. The purpose is the same: it tells the department what you paid each payee, what you deducted, and which challan carried the tax.

The Income Tax Department's guidance note on Form 144 describes it as "Earlier Form 27Q". It maps section 397(3)(b) of the Income Tax Act, 2025 to section 200(3) of the Income Tax Act, 1961. It maps rule 219 to rule 31A of the Income Tax Rules, 1962. The [form guidance page](https://www.incometaxindia.gov.in/faqs-and-guidance-notes-on-forms-as-per-income-tax-rules-2026) on incometaxindia.gov.in lists the note and an FAQ for each new form.

Which form you file depends on the period, not on the date you file.

* Quarters up to 31 Mar 2026 (financial year 2025-26 and earlier) stay on Form 27Q. The January to March 2026 statement, due on 31 May 2026, was a Form 27Q.
* Quarters from 1 Apr 2026 (tax year 2026-27 onwards) use Form 144. The first Form 144, for April to June 2026, was due on 31 Jul 2026.

The department's transition FAQ (Q4.39) says the portal supports old forms for assessment year 2026-27 and earlier. New forms apply from tax year 2026-27. Our guide to the [Income Tax Act, 2025 changes for foreign owned companies](/insights/income-tax-act-2025-changes-for-foreign-owned-companies) covers the wider switch. Our guide on [tax year versus previous year](/insights/tax-year-income-tax-act-2025-previous-year-assessment-year) explains the new year concept.

## Who must file Form 27Q or Form 144?

Every person who deducts tax on a payment to a non resident must file Form 144 for each quarter with such a deduction. The FAQ on Form 144 lists companies, firms, government bodies and individuals as examples. It also says filing is mandatory for each relevant quarter.

The duty to deduct comes from section 393(2) of the Income Tax Act, 2025. Table serial 17 covers "any other sum chargeable" under the Act, other than salary. It applies to sums paid to a non resident other than a company, or to a foreign company. Note 3(b) to Table serial 17 applies the duty to every payer, resident or non resident. It applies whether or not the non resident has a residence, a place of business or a business connection in India. So a foreign company paying another non resident for Indian income also deducts tax.

Rule 219 routes three groups of payments to Form 144 when the payee is one of those three kinds of payee:

1. Payments under section 393(2), which holds the non resident table (the successor of old section 195 and its related sections).
2. Payments under section 393(3), such as winnings or a partner's remuneration, where the payee is non resident.
3. Payments under section 392(7).

Every deductor needs a TAN first. Section 397(1)(a) requires a deductor to apply for one. Section 397(1)(b) requires the TAN on every challan, statement and certificate you issue. Our guide to [TAN registration for a foreign owned company](/insights/tan-registration-for-foreign-owned-company) covers the application.

From 1 Oct 2026 one group no longer needs a TAN or Form 144. A resident individual or Hindu undivided family buying immovable property from a non resident now uses challan cum statement Form 141. The Finance Act, 2026 (Act No. 4 of 2026) substituted section 397(1)(c) to give this TAN relief, and the Memorandum to the Finance Bill, 2026 (clause 74) explains it. Rule 219(5)(e) sets a deadline of 30 days after the end of the month of deduction. Rule 215 then requires Form 132 to the seller within 15 days of the Form 141.

## How does Form 144 differ from Form 24Q and Form 26Q?

Form 24Q (now Form 138) reports salary TDS. Form 26Q (now Form 140) reports TDS on payments other than salary to residents. Form 27Q (now Form 144) reports TDS on payments other than salary to non residents. All three follow the same quarterly due dates under rule 219(4), but the certificates and payee data differ.

| Item | Form 24Q, now Form 138 | Form 26Q, now Form 140 | Form 27Q, now Form 144 |
|---|---|---|---|
| Payments covered | Salary under section 392 | Non salary payments to residents under section 393(1) | Non salary payments to non residents under sections 393(2) and 393(3) |
| Typical payee | Employee | Indian vendor, landlord, contractor | Foreign parent, foreign vendor, non resident individual |
| Due dates | 31 Jul, 31 Oct, 31 Jan, 31 May | Same | Same |
| Certificate | Form 130 (old Form 16), by 15 June after the tax year | Form 131 (old Form 16A), within 15 days after the statement due date | Form 131 (old Form 16A), within 15 days after the statement due date |
| Payee details beyond PAN | Salary details for the year | Section and rate | Country, tax identification number, address abroad, Act or treaty rate |
| Rate source | Slab rates | Fixed rates in section 393(1) | Rates in force or treaty rate under section 159 |

Sources: rules 215 and 219 of the Income Tax Rules, 2026; Form 144 guidance note.

A subsidiary that pays salaries, Indian vendors and a foreign parent files all three each quarter. We keep one TDS register with a column for the form, so every deduction lands in the right statement.

## What are the due dates for Form 27Q and Form 144?

Form 144 is due on 31 July for April to June, 31 October for July to September, and 31 January for October to December. The January to March statement is due on 31 May after the tax year ends. Rule 219(4) sets these dates. Rule 31A gave the same dates for Form 27Q.

The tax itself is due much earlier. Rule 218 requires the deductor to pay TDS within seven days after the end of the month of deduction. Tax deducted in March is due by 30 April.

| Quarter of tax year 2026-27 | Deposit TDS by (rule 218) | File Form 144 by (rule 219) | Issue Form 131 by (rule 215) |
|---|---|---|---|
| April to June 2026 | 7 May, 7 Jun, 7 Jul 2026 | 31 Jul 2026 | 15 Aug 2026 |
| July to September 2026 | 7 Aug, 7 Sep, 7 Oct 2026 | 31 Oct 2026 | 15 Nov 2026 |
| October to December 2026 | 7 Nov, 7 Dec 2026, 7 Jan 2027 | 31 Jan 2027 | 15 Feb 2027 |
| January to March 2027 | 7 Feb, 7 Mar, 30 Apr 2027 | 31 May 2027 | 15 Jun 2027 |

Sources: rules 215, 218 and 219 of the Income Tax Rules, 2026.

For financial year 2025-26, the Form 27Q dates were 31 Jul 2025, 31 Oct 2025, 31 Jan 2026 and 31 May 2026. The full year of filings for a foreign owned company sits in our [compliance calendar for 2026-27](/insights/compliance-calendar-foreign-owned-company-india-2026-27).

## What goes into Form 144?

Form 144 has three parts. Part A holds the deductor's details. Part B holds each challan. The annexure holds one row for every payment to every non resident payee. The Form 144 guidance note lists the fields. Each row carries more data than a resident row in Form 140.

The annexure row for each payment holds these fields:

1. PAN of the payee, where available.
2. Name, status, address and contact details.
3. Tax identification number of the payee.
4. Country to which the remittance is made.
5. Amount paid or credited, and the date.
6. Tax deducted, tax deposited, the date of deduction and the rate applied.
7. Whether the rate is the rate under the Act or under a treaty.
8. The reason for non deduction, lower deduction or higher deduction.
9. The certificate number under section 395, where a certificate applies.

| Situation | What you report in Form 144 | Document you keep |
|---|---|---|
| Treaty rate applied | Rate flagged as DTAA rate; payee's tax identification number and address | Tax Residency Certificate (TRC), Form 41 (old Form 10F), treaty article noted |
| Lower or nil deduction certificate | Reason for lower or nil deduction; certificate number | Form 128 certificate downloaded from TRACES |
| Payer's own determination order under section 395(2) | Tax only on the proportion the officer fixed | The officer's order |
| Payee has no PAN but gave rule 217 details | Name, email, phone, address abroad, TIN | Payee declaration and TRC |
| Payee has no PAN and no rule 217 details | Higher rate under section 397(2)(b)(i) | Working of the higher rate |
| Tax borne by the payer | Grossed up amount under section 393(10) | Grossing up working |

Sources: Form 144 and Form 128 guidance notes; sections 393, 395 and 397 of the Income Tax Act, 2025; rule 217.

### Lower deduction certificates

A non resident can apply on TRACES in Form 128 for a lower or nil deduction certificate under section 395(1). The Form 128 guidance note says the payer "must apply the approved rate for all eligible payments" while the certificate is valid. You quote the certificate in Form 144 and flag the reason as lower or nil deduction. Our guide to the [lower deduction certificate for non residents](/insights/lower-tds-certificate-non-residents-form-128) covers the application.

Section 395(6), inserted by the Finance Act, 2026 from 1 Apr 2026, lets a prescribed authority issue a certificate after verifying the application electronically. Certificates issued on applications filed and decided by 31 Mar 2026 under old section 197 stay protected under section 536(2)(b). The CBDT clarificatory FAQs on transition provisions (July 2026) say so in Q21.

### Treaty rates

The rate in force for most payments in Table serial 17 is the Finance Act rate plus surcharge and cess. A lower treaty rate applies where section 159 of the Income Tax Act, 2025 gives one. The payee must hold a TRC and file Form 41 under section 159(8). Form 144 records whether you used the Act rate or the treaty rate. We apply the treaty rate flat, without surcharge or cess, as tribunals have held. No CBDT circular settles that point.

### Form 145 and Form 146 references

Form 145 (old Form 15CA) is filed before each remittance under section 397(3)(d) and rule 220. Where chargeable remittances exceed INR 5,00,000 in the tax year, Part C needs a chartered accountant's Form 146 (old Form 15CB). Part B is used instead where the payer holds an Assessing Officer certificate under section 395. The Form 145 guidance note says Form 145 helps cross verification with Forms 144, 146 and 147. So the amount, rate and payee in Form 145 must match the Form 144 row.

We note the Form 145 acknowledgement number against each row of our TDS register before we prepare Form 144. Form 144 has no field for that number; the link is our own internal control. Our guide to [Form 145 and Form 146](/insights/form-15ca-and-15cb-requirements-guide-2026) covers each part.

## What TDS rates apply to payments to non residents?

The domestic rates come from Part II of the First Schedule to the Finance Act, 2026. Royalty, fees for technical services and interest on foreign currency borrowings bear 20 percent for a foreign company. Any other income, including interest on a rupee loan, bears 35 percent. Surcharge of 2 or 5 percent and 4 percent cess apply on top.

| Payment to a foreign company | Domestic rate before surcharge and cess (%) | With 4% cess only, payment up to INR 1 crore (%) | Typical treaty cap (%) |
|---|---|---|---|
| Fees for technical services (agreement after 31 Mar 1976) | 20 | 20.8 | Varies by treaty; some treaties have no fee article |
| Royalty (agreement after 31 Mar 1976) | 20 | 20.8 | Varies by treaty |
| Interest on foreign currency borrowings | 20 | 20.8 | For example 15 for the US, UK and Singapore; 10 for Germany and Japan; 7.5 for Mauritius |
| Interest on a rupee loan | 35 | 36.4 | Same treaty interest cap as above |
| Any other income | 35 | 36.4 | Usually no cap; business profit taxable only with a PE |

Sources: Finance Act, 2026, First Schedule, Part II; India's treaty texts on incometaxindia.gov.in.

The surcharge for a company other than a domestic company is 2 percent above INR 1 crore and 5 percent above INR 10 crore. The 5 percent rate in Table serial 2 covers only foreign currency borrowings made from 1 Jul 2012 to 30 Jun 2023. Our guide to [TDS on payments to non residents](/insights/tds-on-payments-to-non-residents) covers rates by payment and the treaty choice.

### Payees without a PAN

Section 397(2)(b)(i) applies a higher rate where the payee gives no valid PAN. The rate is the highest of the normal rate, the rate in force and 20 percent. Rule 217 lifts this for interest, royalty, fees for technical services, dividends and payments on transfer of a capital asset. The non resident must give a name, email, phone number and address abroad. It must also give a TRC where that country issues one, and a tax identification number.

A payee without a PAN still loses something. Form 131 is generated only where the payee is reported with a valid PAN. So the payee sees no credit in Form 168 (old Form 26AS) and may struggle to claim the credit at home. We ask every regular foreign payee to get a PAN. A foreign entity applies in Form 96 and a foreign individual in Form 95, which together replace old Form 49AA. Our guide on [PAN for a foreign company](/insights/pan-for-foreign-company-form-49aa) covers the steps.

## How do you file Form 144?

You prepare Form 144 offline in the department's Return Preparation Utility (RPU) and validate it in the File Validation Utility (FVU). You then upload the validated file online or through a TIN Facilitation Centre. CPC TDS processes it under the Income Tax Act, 2025. The Form 144 guidance note sets out these steps.

1. Reconcile the TDS register with the challans paid in the quarter.
2. Download the latest RPU and FVU for Form 144.
3. Enter Part A, the challans in Part B and each payee row in the annexure.
4. Validate the file in the FVU and fix every error it reports.
5. Upload the validated file and verify it with a digital signature or electronic verification code.
6. Save the receipt. The guidance note says a Return Receipt Number now replaces the old Token Number.
7. Check the processing result on TRACES and pay any default it shows.

The FAQ on Form 144 says the deductor receives an acknowledgement receipt number once the upload succeeds. CPC TDS then processes the statement with or without defaults. A default notice lists short deduction, short payment, late payment interest or late fee.

## When must you issue Form 131 (old Form 16A)?

You issue Form 131 to each payee within 15 days after the due date of the Form 144 statement. Rule 215(1) sets this deadline. You must generate and download the certificate from the portal of the Director General of Income Tax (Systems), which is TRACES. A certificate you prepare yourself in a spreadsheet does not meet the rule.

Rule 215 makes a digital signature optional. A signed certificate must not be editable, and each one carries a control number. If the original is lost, you may issue a duplicate marked as such on the payee's request.

Failure to issue Form 131 has its own penalty. Section 465(2)(g) charges INR 500 a day while the failure continues. Section 465(3) caps it at the tax deductible. This is the successor of old section 272A(2)(g).

The foreign parent's tax team needs Form 131 to claim credit at home. Our guide to the [foreign tax credit and Form 44](/insights/foreign-tax-credit-form-67-india) shows the same process in reverse for Indian companies.

## How do you correct a Form 27Q or Form 144 already filed?

You cannot edit a filed statement. You file a correction statement on TRACES after CPC TDS has processed the original. Section 397(3)(f) sets the time limit. A correction is allowed only "within two years from the end of the tax year in which such statement is required to be delivered". The clause expressly covers statements under section 200 of the Income Tax Act, 1961.

The FAQ on Form 144 gives an example. A correction for the April to June quarter of tax year 2026-27 can be filed up to 31 Mar 2029.

The two year rule also cuts the window for old Form 27Q statements. An Income Tax Department notice on section 397(3)(f) lists the old quarters that close on 31 Mar 2026. They are Q4 of financial year 2018-19, all quarters of 2019-20 to 2022-23, and Q1 to Q3 of 2023-24.

| Statement | Due date | Correction allowed up to |
|---|---|---|
| Form 27Q, Q3 of 2023-24 | 31 Jan 2024 | 31 Mar 2026 (closed) |
| Form 27Q, Q4 of 2023-24 | 31 May 2024 | 31 Mar 2027 |
| Form 27Q, Q4 of 2024-25 | 31 May 2025 | 31 Mar 2028 |
| Form 27Q, Q3 of 2025-26 | 31 Jan 2026 | 31 Mar 2028 |
| Form 27Q, Q4 of 2025-26 | 31 May 2026 | 31 Mar 2029 |
| Form 144, Q1 of 2026-27 | 31 Jul 2026 | 31 Mar 2029 |

Sources: section 397(3)(f) of the Income Tax Act, 2025; Form 144 FAQ 7; Income Tax Department notice on section 397(3)(f). Rows other than the first and last are our reading of the two year rule.

Common corrections are a wrong PAN, a challan tagged to the wrong quarter, a missing payee row, and a treaty flag left unticked. We run a correction as soon as TRACES shows a default, because a closed window cannot be reopened.

## What is the late fee and penalty for Form 27Q and Form 144?

A late Form 144 costs INR 200 for every day of delay under section 427, capped at the tax deductible. You pay the fee before you file. Section 461 adds a penalty of INR 10,000 to INR 1,00,000 for a late statement or wrong information. It does not apply where tax, fee and interest are paid and the statement is filed within one month of the due date.

For Form 27Q statements of 2025-26 and earlier, the same amounts applied under old sections 234E and 271H. The Finance Act, 2026 substituted section 427 from 1 Apr 2026, but the INR 200 a day rule for TDS statements did not change. The substitution added a separate fee for statements of financial transactions under section 508.

| Default | Section under the Income Tax Act, 2025 | Consequence | Old section under the Income Tax Act, 1961 |
|---|---|---|---|
| Statement filed late | 427 | INR 200 a day, capped at the TDS | 234E |
| Statement late beyond one month, or wrong information | 461 | INR 10,000 to INR 1,00,000 | 271H |
| Tax not deducted | 398(3)(a) | Interest at 1 percent a month or part month | 201(1A) |
| Tax deducted but paid late | 398(3)(a) | Interest at 1.5 percent a month or part month | 201(1A) |
| Tax not deducted or not paid | 448 | Penalty equal to the tax | 271C |
| Expense paid without TDS | 35(b)(ii) | Expense disallowed until the tax is paid | 40(a)(i) |
| Form 131 not issued | 465(2)(g) | INR 500 a day, capped at the TDS | 272A(2)(g) |
| Form 145 not filed or wrong | 462 | INR 1,00,000 | 271-I |
| Tax deducted but not paid | 476 | Prosecution, graded by amount | 276B |

Sources: sections 398, 427, 448, 461, 462 and 465 of the Income Tax Act, 2025; Finance Act, 2026.

Section 398(3)(b) requires interest to be paid before the statement is filed. Section 398(4) makes unpaid tax and interest a charge on the deductor's assets. Section 476 grades prosecution by the amount after the Finance Act, 2026. There is no prosecution where the tax is paid by the Form 144 due date.

## What changed in 2026

The Income Tax Act, 2025 came into force on 1 Apr 2026. For non resident TDS it renumbered the forms and sections, cut the correction window, and moved the higher no PAN rate into section 397(2). The quarterly due dates, the INR 200 late fee and the INR 10,000 to INR 1,00,000 penalty did not change.

| Item | Old rule (Income Tax Act, 1961) | New rule (Income Tax Act, 2025) | From | Instrument |
|---|---|---|---|---|
| Quarterly statement for non residents | Form 27Q, section 200(3), rule 31A | Form 144, section 397(3)(b), rule 219 | Tax year 2026-27 (1 Apr 2026) | Income Tax Act, 2025; Income Tax Rules, 2026 |
| Duty to deduct on payments to non residents | Section 195 and related sections | Section 393(2), Table serials 1 to 17 | 1 Apr 2026 | Income Tax Act, 2025 |
| TDS certificate | Form 16A, section 203, rule 31 | Form 131, section 395(4), rule 215, generated from the portal | 1 Apr 2026 | Income Tax Rules, 2026 |
| Lower or nil deduction certificate | Form 13, section 197, Assessing Officer only | Form 128, section 395(1); a prescribed authority may also issue after electronic verification under section 395(6) | 1 Apr 2026 | Income Tax Act, 2025; Finance Act, 2026 |
| Payer's application for the taxable proportion | Section 195(2) | Section 395(2) | 1 Apr 2026 | Income Tax Act, 2025 |
| Higher rate without PAN | Section 206AA, rule 37BC | Section 397(2)(b) and (c), rule 217 | 1 Apr 2026 | Income Tax Act, 2025; Income Tax Rules, 2026 |
| Information before remittance | Form 15CA and 15CB, section 195(6), rule 37BB | Form 145 and 146, section 397(3)(d), rule 220 | Remittances from 1 Apr 2026 | Income Tax Rules, 2026 |
| Correction statement window | Six years from the end of the year the statement was due | Two years from the end of the tax year the statement was due; old quarters listed above closed on 31 Mar 2026 | 1 Apr 2026 | Section 397(3)(f) |
| Late fee for TDS statements | Section 234E, INR 200 a day | Section 427, substituted, same INR 200 a day | 1 Apr 2026 | Finance Act, 2026 |
| Treaty claim | Form 10F, section 90 | Form 41, section 159(8) | 1 Apr 2026 | Income Tax Act, 2025 |
| Annual tax credit statement | Form 26AS | Form 168 | 1 Apr 2026 | Income Tax Rules, 2026 |
| Resident individual buying property from a non resident | Needs TAN and files the non resident statement | No TAN; Form 141 challan cum statement within 30 days of the month end | 1 Oct 2026 | Section 397(1)(c) as substituted; rule 219(5); Finance Act, 2026 |
| Filing receipt | Token Number | Return Receipt Number | Tax year 2026-27 | Form 144 guidance note |

Sources: official form map on incometaxindia.gov.in; Form 144, 128 and 145 guidance notes; sections 393 to 397 and 427 of the Income Tax Act, 2025; Memorandum to the Finance Bill, 2026.

### What has happened since 6 Jan 2026

1. **1 Feb 2026.** The Memorandum to the Finance Bill, 2026 (clause 74) proposed TAN relief from 1 Oct 2026. It covers resident individuals and Hindu undivided families buying property from a non resident.
2. **20 Mar 2026.** CBDT notified the Income Tax Rules, 2026 as G.S.R. 198(E). Rule 219 prescribes Form 144 and rule 215 prescribes Form 131.
3. **31 Mar 2026.** The correction window closed for the old quarters in the department's section 397(3)(f) notice.
4. **1 Apr 2026.** The Income Tax Act, 2025 came into force. The Finance Act, 2026 (Act No. 4 of 2026) substituted section 427 and inserted section 395(6) from this date.
5. **31 May 2026.** The last Form 27Q, for January to March 2026, fell due.
6. **July 2026.** CBDT issued clarificatory FAQs on transition provisions. Q21 protects lower deduction certificates issued by 31 Mar 2026.
7. **31 Jul 2026.** The first Form 144, for April to June 2026, fell due.
8. **1 Oct 2026.** Substituted section 397(1)(c) and rule 219(5)(e), inserted by the Income Tax (Fifth Amendment) Rules, 2026, moved property buyers from a non resident to Form 141.

## Worked example

An Indian subsidiary of a Singapore company pays three non residents in July to September 2026. It holds a TRC and Form 41 for each treaty payee. All payments are under INR 1 crore per payee, so no surcharge applies at domestic rates.

| Date of credit | Payee | Payment | Amount (INR) | Rate applied | TDS (INR) | Deposit by |
|---|---|---|---|---|---|---|
| 15 Jul 2026 | Singapore parent | Interest on a foreign currency ECB | 40,00,000 | 15% treaty | 6,00,000 | 7 Aug 2026 |
| 5 Sep 2026 | Japanese group company | Fees for technical services | 25,00,000 | 10% treaty | 2,50,000 | 7 Oct 2026 |
| 20 Sep 2026 | UK company with a Form 128 certificate | Service fee | 10,00,000 | 2% certificate rate | 20,000 | 7 Oct 2026 |
| Total | | | 75,00,000 | | 8,70,000 | |

The rates in this table are for illustration. Check the treaty article and the certificate for each payee.

Without the treaty documents, the interest would bear 20.8 percent, or INR 8,32,000. The technical fee would bear 20.8 percent, or INR 5,20,000. So the TRC and Form 41 save INR 5,02,000 of withholding this quarter.

**Filing.** Form 144 for the quarter is due on 31 Oct 2026. It carries three challans and three payee rows. Two rows carry the treaty flag. The third carries the lower deduction reason and the certificate number. Form 131 for each payee is due by 15 Nov 2026.

**A late filing.** Suppose the company files on 14 Dec 2026. The delay runs from 1 Nov to 14 Dec, which is 44 days. The fee under section 427 is 44 × INR 200 = INR 8,800. That is below the cap of INR 8,70,000, so the full INR 8,800 is payable before filing. The filing is more than one month late, so the Assessing Officer may also levy a penalty under section 461. The range is INR 10,000 to INR 1,00,000.

**A late deposit.** Suppose the company credits the technical fee on 1 Sep 2026 instead. It pays the INR 2,50,000 of tax on 20 Oct 2026, after the 7 Oct 2026 due date. Interest runs at 1.5 percent a month or part month from 1 Sep to 20 Oct. That is two months, so interest is 2 × 1.5% × INR 2,50,000 = INR 7,500. The company pays it before it files Form 144.

## Common mistakes

1. **Filing Form 144 for a 2025-26 quarter.** The period decides the form. Fix: use Form 27Q for any quarter up to 31 Mar 2026, including the Q4 statement filed in May 2026.
2. **Applying the treaty rate without a TRC or Form 41.** The treaty rate needs both under section 159(8). Fix: collect the TRC and the Form 41 acknowledgement before the first payment of each tax year.
3. **Adding surcharge and cess to a treaty rate.** This over deducts and the payee then chases a refund. Fix: apply the treaty rate flat and record the article in Form 146.
4. **Mismatched Form 145 and Form 144.** The department cross verifies them. Fix: tie each Form 145 acknowledgement to the TDS register row before the quarter closes.
5. **Ignoring a payee's missing PAN.** The payee gets no Form 131 and no credit in Form 168. Fix: ask regular payees for a PAN, or collect the rule 217 details at onboarding.
6. **Leaving corrections for later.** The two year window under section 397(3)(f) closes on a fixed date. Fix: clear every TRACES default within the same tax year.
7. **Issuing a self made TDS certificate.** Rule 215(1) requires the certificate to come from the portal. Fix: download Form 131 from TRACES for every payee.
8. **Treating 30 April as a general deposit date.** Rule 218 gives 30 April only for tax deducted in March. Fix: deposit tax for April to February by the seventh of the next month.

If you want us to prepare or review a Form 144 for your subsidiary, write to us with the quarter's TDS register and challans.

## Checklist

1. Obtain a TAN before the first payment to a non resident.
2. Collect the TRC, Form 41 acknowledgement, PAN or rule 217 details, and any Form 128 certificate for each payee.
3. Decide the rate for each payment: Act rate with surcharge and cess, treaty rate flat, or certificate rate.
4. File Form 145, with Form 146 where needed, before each remittance.
5. Deposit the tax by the seventh of the next month, or by 30 April for March.
6. Record each payment, challan and Form 145 acknowledgement in one TDS register.
7. Prepare Form 144 in the RPU and validate it in the FVU.
8. Upload Form 144 by 31 July, 31 October, 31 January or 31 May.
9. Download and issue Form 131 within 15 days after the due date.
10. Review the TRACES processing result and file any correction within the same tax year.

## Key terms

- **Form 144 (old Form 27Q)**: The quarterly TDS statement for payments to non residents under section 397(3)(b) of the Income Tax Act, 2025, which replaced Form 27Q. It is due 31 Jul, 31 Oct, 31 Jan and 31 May under rule 219 of the Income Tax Rules, 2026, and records any lower deduction certificate number under section 395. (https://krystal7.com/glossary#form-144-old-form-27q)
- **Form 131 (old Form 16A)**: Form 131 is the TDS certificate, other than for salary, that an Indian payer downloads from TRACES and gives the payee, including a foreign parent. It replaced Form 16A from 1 Apr 2026. Rule 215(1) of the Income Tax Rules, 2026 requires it within 15 days of the due date of the quarterly Form 144 or Form 140. (https://krystal7.com/glossary#form-131-old-form-16a)
- **Tax Deduction and Collection Account Number (TAN)**: TAN is the ten character number the Income Tax Department allots to a person who must deduct or collect tax at source. It must be quoted on every TDS challan, quarterly statement and certificate, such as Forms 140, 144 and 131 under the Income Tax Rules, 2026. A new Indian company gets its TAN through SPICe+ at incorporation. (https://krystal7.com/glossary#tax-deduction-and-collection-account-number)
- **Form 128 (old Form 13)**: Form 128 is the application a payee makes under section 395 of the Income Tax Act, 2025 for a certificate allowing tax to be deducted at a lower rate or not at all. It replaced Form 13 from 1 Apr 2026. A payment covered by such a certificate goes in Part B of Form 145, with no Form 146. (https://krystal7.com/glossary#form-128-old-form-13)
- **Form 145 (old Form 15CA)**: Form 145 is the online statement an Indian payer files on the income tax portal before remitting money to a non resident. It replaced Form 15CA for money remitted from 1 Apr 2026 under the Income Tax Rules, 2026. Section 462 of the Income Tax Act, 2025 sets a penalty of INR 1,00,000 for a missing or wrong form. (https://krystal7.com/glossary#form-145-old-form-15ca)
- **Rates in force**: The rates of tax at source that the annual Finance Act sets for each kind of payment to a non resident, plus surcharge and cess. A lower treaty rate replaces them where section 159 of the Income Tax Act, 2025 applies. (https://krystal7.com/glossary#rates-in-force)
- **Correction statement**: A revised TDS statement filed on TRACES to fix errors in a statement already processed, such as a wrong PAN, challan or amount. Section 397(3)(f) of the Income Tax Act, 2025 limits it to two years from the end of the tax year in which the statement was due. (https://krystal7.com/glossary#correction-statement)

## Frequently Asked Questions

### What is Form 27Q used for?

Form 27Q is the quarterly TDS statement for payments other than salary to non residents, foreign companies and residents but not ordinarily resident. It was filed under section 200(3) of the Income Tax Act, 1961 and rule 31A for quarters up to 31 Mar 2026. From tax year 2026-27 the same statement is Form 144 under section 397(3)(b) of the Income Tax Act, 2025.

### Is Form 27Q still used after 1 April 2026?

Yes, but only for quarters up to 31 Mar 2026. The January to March 2026 statement, due on 31 May 2026, was a Form 27Q. Corrections to old quarters also use Form 27Q. Any quarter from 1 Apr 2026 onwards uses Form 144 under rule 219 of the Income Tax Rules, 2026.

### What is the due date of Form 144 for the July to September quarter?

Form 144 for July to September is due on 31 October of the same tax year, so 31 Oct 2026 for tax year 2026-27. Rule 219(4) of the Income Tax Rules, 2026 sets this date. The tax deducted in those months must already be deposited by the seventh of the following month under rule 218.

### Who files Form 144 when a foreign parent is paid?

The Indian payer files it, usually the Indian subsidiary that credits or pays the sum. Section 393(2) of the Income Tax Act, 2025 places the duty on any person responsible for paying a non resident. The payer needs a TAN under section 397(1), deposits the tax, files Form 144 each quarter and issues Form 131.

### What is the late fee for filing Form 27Q or Form 144 late?

The late fee is INR 200 for every day the statement is late, capped at the tax deductible. Section 427 of the Income Tax Act, 2025 charges it for Form 144, and old section 234E charged it for Form 27Q. The fee must be paid before the statement is filed. A penalty under section 461 can also apply after one month.

### Is there a penalty on top of the late fee?

Yes. Under section 461 of the Income Tax Act, 2025, the Assessing Officer may levy INR 10,000 to INR 1,00,000. It covers a late statement or wrong information. No penalty applies for lateness if the tax, fee and interest are paid and Form 144 is filed within one month after the due date. Wrong information has no such grace.

### What replaced Form 16A for non resident payees?

Form 131 replaced Form 16A from tax year 2026-27. The deductor downloads it from TRACES. Rule 215 of the Income Tax Rules, 2026 requires it within 15 days after the Form 144 due date. Failure to issue it costs INR 500 a day under section 465(2)(g), capped at the tax deductible.

### Can a non resident without a PAN get Form 131?

No. Form 131 is generated only where the payee is reported in Form 144 with a valid PAN. The payee then sees no credit in Form 168 and may lose the credit at home. Rule 217 only saves the payee from the higher no PAN rate for interest, royalty, technical fees, dividends and capital asset transfers.

### How long do I have to correct Form 144?

Section 397(3)(f) of the Income Tax Act, 2025 sets the limit. You have two years from the end of the tax year in which the statement was due. A correction for the April to June 2026 quarter can be filed up to 31 Mar 2029. You file it on TRACES after CPC TDS has processed the original statement.

### Can I still correct a Form 27Q from 2022-23?

No. An Income Tax Department notice on section 397(3)(f) lists the closed quarters. Corrections for all quarters of 2019-20 to 2022-23 were accepted only until 31 Mar 2026. The same cut off applied to Q4 of 2018-19 and Q1 to Q3 of 2023-24. A wrong old statement now stays as filed, so the payee may need to take up any credit gap directly.

### How do I show a treaty rate in Form 144?

Each payee row has a field that records whether the rate follows the Act or a treaty. Flag the treaty rate and enter the payee's country and tax identification number. Keep the TRC and Form 41 acknowledgement on file. Section 159(8) of the Income Tax Act, 2025 makes them conditions for the treaty rate.

### How do I report a lower deduction certificate in Form 144?

Enter the lower or nil deduction reason and the certificate number in the payee row, and apply the certificate rate. The payee obtains the certificate in Form 128 under section 395(1) of the Income Tax Act, 2025. Check its validity dates and amount limit on TRACES, because the normal rate returns once it expires.

### Does Form 144 need to match Form 145?

Yes. The guidance note on Form 145 says the department cross verifies it against Forms 144, 146 and 147. The payee, amount, rate and country should match between the remittance statement and the TDS row. A mismatch can trigger a notice, and a wrong Form 145 can draw a INR 1,00,000 penalty under section 462.

### What interest applies if TDS on a non resident payment is paid late?

Section 398(3)(a) of the Income Tax Act, 2025 charges 1.5 percent a month or part month. It runs from the date of deduction to the date of payment. Where tax was not deducted at all, the rate is 1 percent a month from the date it was deductible. The interest must be paid before Form 144 is filed.

### Does a foreign company with no Indian presence have to file Form 144?

It does if it pays another non resident a sum chargeable to tax in India. Note 3(b) to Table serial 17 in section 393(2) of the Income Tax Act, 2025 applies the duty to every payer. That includes a non resident payer with no presence in India. Such a payer needs a TAN and files Form 144 like an Indian company.

### Do I file Form 144 when no tax was deducted in a quarter?

Section 397(3)(b) requires a statement after paying tax deducted, so a quarter with no deduction at all usually needs no Form 144. If you paid a non resident at nil under a Form 128 certificate, report that payment with the nil deduction reason. We check TRACES for any expected statement flags before skipping a quarter.

## Sources

- Income Tax Department, Income Tax Act, 2025, section 393 (tax to be deducted at source), as amended by the Finance Act, 2026, https://www.incometaxindia.gov.in/w/section-393-6
- Income Tax Department, Income Tax Act, 2025, section 395 (certificates), https://www.incometaxindia.gov.in/w/section-395-6
- Income Tax Department, Income Tax Act, 2025, section 397 (compliance and reporting), https://www.incometaxindia.gov.in/w/section-397-6
- Income Tax Department, Income Tax Act, 2025, section 398 (consequences of failure to deduct or pay), https://www.incometaxindia.gov.in/w/section-398-6
- Income Tax Department, Income Tax Act, 2025, section 427 (fee for default in furnishing statements), https://www.incometaxindia.gov.in/w/section-427-6
- Income Tax Department, Income Tax Act, 2025, section 448 (penalty for failure to deduct), https://www.incometaxindia.gov.in/w/section-448-6
- Income Tax Department, Income Tax Act, 2025, section 461 (penalty for failure to furnish statements), https://www.incometaxindia.gov.in/w/section-461-6
- Income Tax Department, Income Tax Act, 2025, section 462 (penalty for Form 145 failures), https://www.incometaxindia.gov.in/w/section-462-6
- Income Tax Department, Income Tax Act, 2025, section 465 (penalties for specified failures), https://www.incometaxindia.gov.in/w/section-465-6
- Income Tax Department, Income Tax Rules, 2026, rule 215 (certificates), https://www.incometaxindia.gov.in/w/rule-215-1
- Income Tax Department, Income Tax Rules, 2026, rule 217 (non residents without PAN), https://www.incometaxindia.gov.in/w/rule-217-1
- Income Tax Department, Income Tax Rules, 2026, rule 218 (time and mode of payment), https://www.incometaxindia.gov.in/w/rule-218-1
- Income Tax Department, Income Tax Rules, 2026, rule 219 (statements of tax deducted or collected), https://www.incometaxindia.gov.in/w/rule-219-1
- Income Tax Department, Guidance note on Form 144 (earlier Form 27Q), https://www.incometaxindia.gov.in/documents/d/guest/fn-144
- Income Tax Department, FAQs on Form 144, https://www.incometaxindia.gov.in/documents/d/guest/form-144-faqs
- Income Tax Department, Guidance note on Form 145 (earlier Form 15CA), https://www.incometaxindia.gov.in/documents/d/guest/fn-145
- Income Tax Department, Guidance note on Form 128 (earlier Form 13), https://www.incometaxindia.gov.in/documents/d/guest/fn-128- Income Tax Department, FAQs and guidance notes on forms as per Income Tax Rules, 2026, https://www.incometaxindia.gov.in/faqs-and-guidance-notes-on-forms-as-per-income-tax-rules-2026
- Income Tax Department, Notice on correction statements under section 397(3)(f), https://incometaxindia.gov.in/documents/d/guest/engnew-397_compressed
- CBDT, Clarificatory FAQs on transition provisions under section 536 (Q21), July 2026, https://www.incometaxindia.gov.in/documents/81799/15800173/FAQs-on-Transition-Provisions.pdf/f12b6c7c-1023-be74-8a3f-964563286129?t=1783342520234
- Income Tax Department, Finance Act, 2026, First Schedule, https://www.incometaxindia.gov.in/w/first-schedule-104
- Ministry of Finance, Memorandum explaining the provisions in the Finance Bill, 2026, 1 Feb 2026, https://www.indiabudget.gov.in/doc/memo.pdf

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