What Is Form 144 (Formerly Form 27Q)?
Form 144 (formerly Form 27Q) is the quarterly statement that a person deducting tax at source must file with the Income Tax Department when the payment was made to a non-resident. The Income Tax Department's own user manual for the form states it directly: "Form 144 is a quarterly statement that must be filed by persons who deduct tax at source (TDS) on payments (Other than salary) made to non-residents." The form was known as Form 27Q until 31 March 2026; the Income-tax Rules, 2026 renumbered it with effect from 1 April 2026, and the underlying obligation — report every rupee of TDS deducted on a non-resident payee's income — is unchanged. If you are searching for Form 144, this is the same statement under its current number.
Form 144 is the reporting side of a withholding duty that already exists independently: whenever an Indian payer deducts tax under section 393(2) on interest, royalties, fees for technical services, capital gains, or any other sum paid to a non-resident, that deduction has to show up on a Form 144 statement for the quarter in which it was made. A foreign investor who never sees the form should still care about it, because the accuracy and timeliness of the payer's Form 144 filing is what lets the non-resident later claim TDS credit against Indian tax, or against tax in their home jurisdiction under a treaty.
Legal Basis
- Section 393(2) of the Income-tax Act, 2025 (Table, Sl. No. 17; section 195 of the Income-tax Act, 1961) — Requires deduction of tax at source, at the rates in force, on any payment (other than salary) made to a non-resident that is chargeable to tax in India. This is the deduction that Form 144 later reports.
- Section 397(3)(b) of the Income-tax Act, 2025 (section 200(3) of the Income-tax Act, 1961) — The statutory basis for the statement itself. The Act's text reads: "every person responsible for deduction or collection of tax or employer referred to in section 392(2)(a), after paying the tax to the credit of the Central Government as per clause (a), shall deliver or cause to be delivered to the prescribed income-tax authority or the person authorised by such authority, a statement for such period, in such form, verified in such manner, giving such particulars, and within such time, as may be prescribed." Form 144 is the prescribed form for non-resident payees under this clause; Form 140 (formerly Form 26Q) and Form 138 (formerly Form 24Q) are the equivalent prescribed statements for TDS on resident non-salary payments and on salary.
- Section 397(1) of the Income-tax Act, 2025 (section 203A of the Income-tax Act, 1961) — Every deductor must first hold a Tax Deduction Account Number (TAN); Form 144 cannot be filed without one.
- Section 397(3)(f) of the Income-tax Act, 2025 — Lets a deductor correct a filed statement by delivering a correction statement, within two years from the end of the tax year in which the original statement was due.
- Section 427(1) and (2) of the Income-tax Act, 2025 (section 234E of the Income-tax Act, 1961) — The fee for filing Form 144 late.
The Income-tax Act, 2025 came into force on 1 April 2026; under section 536(2)(c) the Income-tax Act, 1961 continues to apply to any tax year beginning before that date, so Form 27Q under the 1961 Act still governs statements for FY 2025-26 and earlier.
Who Must File Form 144
Any person who deducts tax at source on a payment to a non-resident must file Form 144 for the quarter in which the deduction was made — the obligation is not limited to companies. It reaches:
- Indian subsidiaries paying royalties, technical service fees, or dividends to a foreign parent
- Banks and financial institutions paying interest on foreign-currency loans or NRO/NRE deposits to non-resident individuals
- Any Indian company, LLP, partnership firm, or individual making a payment covered by section 393(2) — including one-off payments such as capital gains distributions or purchase consideration paid to a non-resident seller
- Government departments and offices making payments to non-resident vendors or contractors
There is no size or turnover exemption. The filing obligation follows from having deducted (or being required to deduct) tax under section 393(2) — not from the payer's own tax status.
Quarterly Due Dates
Form 144 is filed every quarter of the financial year. Per the Income Tax Department's Form 144 user manual, the due dates are:
| Quarter | Period | Due Date |
|---|---|---|
| Q1 | April – June | 31 July |
| Q2 | July – September | 31 October |
| Q3 | October – December | 31 January |
| Q4 | January – March | 31 May (of the following financial year) |
Filing on time matters beyond avoiding a fee: the non-resident payee's TDS credit, and any reflection of the deduction in Form 168 (formerly Form 26AS) or the Annual Information Statement, depends on the payer's statement being filed and processed. A late or unfiled Form 144 can leave a non-resident unable to reconcile the tax already withheld from their income against their eventual tax liability or refund claim.
PAN and the Cost of a Missing PAN
Section 397(2)(a) requires every person entitled to receive a payment on which tax is deductible to furnish a valid Permanent Account Number (PAN) to the deductor. Where the payee fails to do so, section 397(2)(b) requires the deductor to deduct tax at the highest of: the rate specified in the relevant provision of the Act, the rate or rates in force, or 5% where the deduction falls under section 393(1) (Table, Sl. No. 8(ii) or 8(v)); in any other case, 20%. For a non-resident payee without a PAN, this can push the withholding rate well above the DTAA-reduced rate the payee might otherwise claim, and that higher-rate deduction is what then gets reported on the payer's Form 144 for the quarter. Section 397(2)(c) carves out one class: the higher-rate rule does not apply to a non-resident other than a company or a foreign company in respect of interest on long-term bonds under section 393(2) (Table, Sl. Nos. 2, 3 and 4), or to any other payment on the conditions prescribed.
Penalty and Interest Exposure for Late or Non-Filing
Two separate consequences attach to a late or missing Form 144:
- Late-filing fee — section 427(1) and (2) of the Income-tax Act, 2025. A payer who fails to deliver the statement within the prescribed time is liable to a fee of ₹200 for every day the failure continues. The fee cannot exceed the amount of tax deductible or collectible for the period, and must be paid before the statement is delivered.
- Interest on late deposit of the tax itself — section 398(3)(a) of the Income-tax Act, 2025. Where the underlying tax was not deducted or, having been deducted, was not deposited on time, simple interest applies at 1% per month (or part of a month) for the period the tax remained undeducted, and 1.5% per month for the period between deduction and actual payment. This interest is separate from, and in addition to, the section 427 filing fee — a payer who deducts tax correctly but deposits and reports late can face both.
Neither consequence depends on whether the underlying payment enjoyed a DTAA-reduced rate; the fee and interest attach to the mechanics of deduction, deposit, and reporting, not to the substantive tax rate applied.
Why Form 144 Matters for Foreign Companies and Investors
For a foreign parent, investor, or individual receiving payments from India, Form 144 is usually invisible until something goes wrong with it. Three situations make it visible:
- Claiming a tax credit or refund. A non-resident who wants to claim credit for Indian TDS — in their home country, or in an Indian return filed to claim a refund of over-withheld tax — needs the Indian payer's Form 144 to have been filed correctly and on time so that the deduction is reflected against the payee's PAN.
- DTAA rate disputes. If a payer under-deducts tax by applying a DTAA-reduced rate without the payee's Form 41 (formerly Form 10F) and Tax Residency Certificate on file, the discrepancy surfaces when the Assessing Officer reviews the Form 144 statement against the rate that should have applied under section 393(2).
- Remittance compliance. Payments to non-residents routed through an authorised dealer bank also require Forms 145 and 146 (formerly Forms 15CA and 15CB) at the time of remittance. Form 144 is the subsequent quarterly reconciliation of the same payments from the deductor's side — a mismatch between the two is a common trigger for scrutiny.
A foreign investor structuring recurring payments from an Indian subsidiary — management fees, royalties, interest on a shareholder loan — should confirm with the Indian entity's finance team that Form 144 is filed every quarter, not just that TDS is being deducted. Deduction without correct reporting still leaves the non-resident payee's credit unresolved.
Practical Example
A US parent company licenses software to its Indian subsidiary for a royalty of ₹50 lakh per quarter. The Indian subsidiary deducts TDS under section 393(2) at the DTAA rate available under the India-US treaty, having verified the parent's Form 41 (formerly Form 10F) and Tax Residency Certificate are on file. The subsidiary deposits the deducted tax to the credit of the Central Government and then files Form 144 for that quarter, reporting the payment, the rate applied, and the tax deducted, by the applicable due date. If the subsidiary instead deposits the tax but misses the Form 144 due date by 15 days, it becomes liable for a fee of ₹200 for each of those 15 days under section 427(1) — capped at the amount of tax deductible for the period — even though the tax itself was paid on time.
Frequently Asked Questions
Is Form 144 the same as Form 144?
Yes. Form 144 was renumbered to Form 144 under the Income-tax Rules, 2026, effective 1 April 2026. The statement, its purpose — reporting TDS on payments to non-residents — and the underlying quarterly filing duty are unchanged; only the number changed.
Who is responsible for filing Form 144 — the Indian payer or the non-resident payee?
The Indian payer (the deductor) files Form 144. The non-resident payee has no filing obligation for this form; their interest in it is indirect, through the TDS credit that depends on the payer's statement being filed correctly and on time.
Does Form 144 need to be filed even if a DTAA reduces the withholding rate to a lower rate?
Yes. Form 144 reports whatever tax was actually deducted under section 393(2), whether at the domestic rate or at a DTAA-reduced rate. Applying a treaty rate changes the amount reported, not whether the statement is required.
What happens if the non-resident payee does not have a PAN?
Under section 397(2), a deductor must deduct tax at the higher of the rate specified in the relevant provision, the rate or rates in force, or — outside specific listed categories — 20%, when the payee has not furnished a valid PAN. That higher-rate deduction is what then appears on the payer's Form 144 for the quarter.
Can a mistake in a filed Form 144 be corrected?
Yes. Section 397(3)(f) of the Income-tax Act, 2025 allows the deductor to deliver a correction statement, within two years from the end of the tax year in which the original statement was required to be delivered.
See also: Section 393(2) — TDS on Payments to Non-Residents, Tax Deduction at Source (TDS), and Tax Deduction Account Number (TAN).
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