TCS Form 27EQ Q4 FY 2025-26 was due 15-May-2026: late-fee meter, car-scrap-LRS rates and what deductors must close on 20-May

The Form 27EQ deadline for the January-March 2026 quarter under Rule 31AA of the Income-tax Rules 1962 lapsed on 15-May-2026. By the time markets open on Wednesday 20-May-2026, the Section 234E late-fee meter has clocked five days at Rs 200 per day, taking each unfiled return to Rs 1,000 before the penalty under Section 271H even enters the picture. Tax-collection-at-source filers — motor-vehicle dealers, scrap merchants, jewellers, authorised dealers handling Liberalised Remittance Scheme outflows — sit in a 30-day cure window before higher-grade exposure begins.

This watchlist sets out the rate table that should already be reflected in those statements, the specific line items the Income-tax Department compares Form 27EQ against, and the sequence finance teams should run on the morning of 20-May to stop the bleed. The brief draws strictly on the statute (Section 206C of the Income-tax Act 1961, Rule 31AA of the Income-tax Rules 1962) and on the rate-card carried forward through Finance Act 2024.

Statutory Deadlines

Rule 31AA prescribes a quarterly cadence for the TCS statement. Three of the four quarters get 15 days after quarter-end. The fourth gets a six-week runway because it overlaps with year-end book-closure.

The Form 27D certificate window of 15 days from the date of filing the return is set under Rule 37D. Deductors who file the 27EQ on 20-May-2026 therefore push their 27D issuance into the first week of June, narrowing the buyer's reconciliation runway before advance-tax instalment one on 15-Jun-2026.

The daily Rs 200 late fee under Section 234E is capped at the TCS amount itself — collect Rs 8,000 and the late fee cannot exceed Rs 8,000 — but the cap does not apply to the discretionary penalty under Section 271H, which sits in the Rs 10,000 to Rs 1,00,000 band and applies independently if the statement is not filed within one year of the original due date. Tomorrow's filing closes both gates in one keystroke.

For parallel MCA windows that finance teams should already have on the calendar, see the AOC-4 and MGT-7 FY 2025-26 schedule.

Market Events: the TCS rate sheet that 27EQ must reconcile to

Section 206C is a patchwork of sub-sections, each with its own threshold and rate. The 27EQ schema on the TIN-NSDL portal flags inconsistencies on upload, so the rate column inside the return must match the section code the deductor selects.

Two carve-outs introduced by Finance Act 2024 change what should appear on the 27EQ for the March-quarter window. First, with effect from 01-Apr-2025, Section 206C(1H) on sale of goods is switched off if the same transaction is subject to TDS under Section 194Q at the buyer's end. Deductors who continued running both heads of withholding after April will see TDS-TCS double-counting in their AIS, which the AO routinely picks up on Section 143(1)(a) intimations. Second, the LRS threshold of Rs 10 lakh under Section 206C(1G) — raised from Rs 7 lakh effective 01-Oct-2023 — applies on a per-PAN per-financial-year basis, not per remittance. Authorised dealers running on a per-transaction trigger will under-report.

The Reserve Bank's LRS data, published monthly under the Foreign Exchange Management (Current Account Transactions) Rules 2000, shows that outward remittances by resident individuals continue to cluster around investment, gift and travel categories — the heads where 206C(1G) bites first. See the RBI LRS bulletin notes for the cross-check between deductor totals and central-bank aggregates.

A reconciliation sequence that finance teams should run before hitting submit on 20-May:

1. Pull the 26AS-style sales register from the ERP, filtered for invoice date between 01-Jan-2026 and 31-Mar-2026.
2. Bucket transactions by 206C sub-section using the rate sheet above.
3. For 206C(1H) buyers, subtract the rows where the buyer already issued a Section 194Q TDS certificate — those must drop out post-April 2025.
4. For 206C(1G) LRS rows, aggregate per PAN per FY (not per quarter) to apply the Rs 10 lakh threshold correctly.
5. Tally the TCS collected against the challan-level deposits in the Form 27EQ Annexure I and the deductee-level breakup in Annexure II.

Readers running the year-end investment side of the same finance close can sanity-check growth assumptions on our SIP calculator, lumpsum calculator and step-up SIP calculator — useful when the buyer asks for a three-year cashflow view on the credit-line they are about to draw against the TCS-reduced receivable.

Earnings: where corporate reporting and 27EQ intersect

The briefing for 20-May-2026 does not flag any confirmed Q4 earnings releases against this watchlist, so this section avoids naming any single issuer. What it does flag is the structural overlap between Form 27EQ Q4 filings and the corporate-results calendar: SEBI's Listing Obligations and Disclosure Requirements (LODR) Regulations 2015 require listed companies to publish quarterly and annual financial results within 60 days of the end of the financial year, which falls on 30-May-2026 for the March-2026 quarter. That is the same week the Form 27D certificate window closes.

Issuers that collect TCS on motor-vehicle dealerships, scrap divisions, jewellery franchises or LRS-linked overseas-tour-package businesses will find the 27EQ totals flowing into two disclosure lines:

• Other current assets (TCS receivable, where the customer-paid TCS is to be claimed back against the company's own advance-tax obligation).
• Statutory dues payable (TCS collected but not yet remitted within the seven-day rule under Rule 37CA).

A misfiled 27EQ that overstates TCS collected will inflate the other-current-assets line; an under-filed 27EQ will leave a reconciliation gap in the AIS view that flows through to the company's own ITR-6 in October. The treasurer's question for 20-May morning: does our trial-balance TCS-receivable tally to the 27EQ totals we are about to upload?

For the boundary between TCS quarterly statements and the full year-end tax-audit picture, the tax audit Form 3CD timeline for 30-Sep-2026 flags how clause 34 of Form 3CD ties each quarter's 27EQ into the auditor's overall TDS-TCS reconciliation.

The TCS-receivable side also intersects with mutual-fund-house treasuries, where the cost ladder is set by SEBI rules — the mutual fund TER cap structure shows how the same expense-line discipline is enforced one regulator over.

What to do tomorrow morning

For deductors who missed the 15-May-2026 cut-off, the catch-up checklist for 20-May:

• Compute the 234E exposure. Five days at Rs 200 per day, per statement. Pay the late fee under the 234E challan series (minor head 400) before uploading the 27EQ — the portal will reject the return if the late-fee challan is not pre-deposited.
• Verify PAN coverage. Any deductee without a valid PAN attracts the higher 206CC rate (5% or twice the section rate, whichever is higher). Returns uploaded with PAN-NOT-AVAILABLE flag on more than 5% of deductee rows trigger a notice cycle.
• Re-cast the 206C(1H) workings. Pull the buyer-side Section 194Q certificates for transactions on or after 01-Apr-2025. Drop those rows from the 27EQ TCS computation.
• Issue Form 27D within 15 days. A late 27EQ filing pushes the 27D deadline into early June. Communicate the revised certificate date to buyers, since their Form 26AS will not show the credit until the 27EQ is processed.
• Set the Q1 FY 2026-27 calendar. Q1 statement is due 15-Jul-2026. Diary it now while the failure-mode is fresh.

For the wider compliance picture, the official statutory text of Section 206C is on the Income-tax Act page at the Income-tax Department and the consolidated Income-tax Rules 1962 (which carry Rule 31AA and Rule 37CA) are mirrored at India Code.

FAQ

Is the Form 27EQ Q4 FY 2025-26 deadline 15-May or 31-May?

The Form 27EQ Q4 FY 2025-26 deadline is 15-May-2026 under Rule 31AA(2) of the Income-tax Rules 1962. The 31-May date that some calendars carry relates to Form 24Q salary TDS for Q4, not to TCS Form 27EQ.

What is the Section 234E late fee if I file Form 27EQ on 20-May-2026?

A 20-May-2026 filing is five days late. Section 234E imposes Rs 200 per day, so the late fee is Rs 1,000 per statement, capped at the TCS amount actually deducted. The cap does not apply to the discretionary penalty under Section 271H (Rs 10,000 to Rs 1,00,000).

Does Section 206C(1H) on sale of goods still apply in FY 2025-26?

It applies up to 31-Mar-2025. From 01-Apr-2025 onward, Finance Act 2024 switches off 206C(1H) where the same transaction is subject to Section 194Q TDS at the buyer's end, removing the dual-deduction problem.

What is the TCS rate on foreign remittance under LRS for FY 2025-26?

5% on remittances above the Rs 10 lakh per-PAN per-FY threshold under Section 206C(1G). The threshold was revised from Rs 7 lakh with effect from 01-Oct-2023. Overseas tour packages remain at 5% up to Rs 7 lakh per FY and 20% above.

Can I file Form 27EQ without quoting buyer PAN?

Yes, but the deductee's row attracts the higher 206CC rate — 5% or twice the section rate, whichever is higher. The portal also flags returns where the PAN-NOT-AVAILABLE share exceeds 5% of deductee rows, which feeds the risk-rating model used for assessment selection.

When must Form 27D be issued for Q4 FY 2025-26?

Within 15 days of filing Form 27EQ under Rule 37D. A 20-May-2026 filing puts the 27D issuance date on or before 04-Jun-2026. The buyer cannot claim the TCS in their advance-tax computation until the 27D is in hand and the Form 26AS reflects the credit.

Does the higher 20% LRS rate apply from 01-Oct-2023?

No. The 20% rate proposed in Finance Act 2023 for LRS remittances was deferred by CBDT Notification 90/2023. The applicable LRS rate above the Rs 10 lakh threshold remains 5% under Section 206C(1G), except overseas tour packages above Rs 7 lakh which are at 20%.