Rate of tax in form 26Q/27EQ for non collection of tds/tcs

Hi Krishna! Your thinking is correct.

When you are not deducting or collecting TDS/TCS due to exemption conditions (like transporter owning less than specified vehicles or Form 27C submitted by the customer), in Form 26Q/27EQ, the rate of tax should be entered as 0%.

Here’s why:

• The exemption means no tax is deducted/collected.

• The tax rate field is to indicate the actual rate at which tax is deducted/collected.

• Since no deduction/collection is made, the rate is 0%.

You don’t mention the hypothetical or standard rate (like 1%) in this case.

So in the RPU file or software, enter 0% as the rate of tax for such exempted transactions.