E-Paper
I-T Dept to charge higher TDS for ‘specified persons’ from July 1
The Central Board of Direct Taxes (CBDT) issued a circular on Monday on the implementation of Section 206AB and Section 206CCA with regard to higher tax deduction/collection for certain non-filers.
The Income Tax (I-T) Department said on Monday it has come up with a new utility to help tax deducted at source (TDS) collectors and tax collected at source (TCS) collectors to identify ‘specified persons’ on whom higher rates of taxes will be levied from July 1.
The 2021 budget introduced a provision which mandated that all non-filers of income tax return (ITR) for the past two fiscal years will be subjected to higher TDS and higher TCS, if such tax deduction was ₹50,000 or more in each of these previous two years, according to news agency PTI.
The Central Board of Direct Taxes (CBDT) issued a circular on Monday on the implementation of Section 206AB and Section 206CCA with regard to higher tax deduction/collection for certain non-filers. “New functionality issued for compliance checks for sec 206AB and 206CCA to ease compliance burden of tax deductors/collectors,” the I-T department tweeted.
The CBDT added there will be an additional compliance burden on the TDS deducters and TCS collectors as they will have to carry out a due diligence on whether the deductee or collectee is a specified person. This can be done by feeding in the PAN number of the deductee or collectee on the functionality to know whether he/she is a specified person.
PTI reported that the IT-department prepared a list of these specified persons at the start of financial year 2021-22. The list comprises names of taxpayers who did not file ITR for assessment years 2019-20 and 2020-21 and have aggregate of TDS and TCS of ₹50,000 or more in each of these two previous years.
The new rate of TDS will be greater than the following three:
> Double the rate specified in the relevant provision of the Income Tax Act or
> Double the rate or rates in force or
> At the rate of five per cent
Speaking to Livemint, Abhishek Soni, co-founder and CEO of Tax2win.in said that in the previous budget, section 206AB was brought in to in order to deduct a higher rate of TDS in cases where the ITR was not filed for the past two years and the TDS deducted in each of these years exceeded ₹50,000. “Basically, the Government wants to ensure the filing of return of income by those people who have suffered a reasonable amount of TDS/TCS,” Soni said.
He also said the new TDS rule will not apply to taxpayers whose total TDS deduction in each previous year is less than ₹50,000 or they have been filing their ITR regularly for the past two years.
In view of the coronavirus disease pandemic in the country, the CBDT has extended the last date to file ITR for financial year 2020-21 or assessment year 2021-22 to September 30, 2021.
(With PTI inputs)
