TDS/TCS on non-filer at higher rates In the Budget 2021, a new Section 206AA is inserted to penalize the person who has not filed their Income Tax Ret
TDS/TCS on non-filer at higher rates
In the Budget 2021, a new Section 206AA is inserted to penalize the person who has not filed their Income Tax Return.
Section 206AA of the Act provides for a higher rate of TDS for the non-furnishing of PAN. Similarly, section 206CC of the Act provides for a higher rate of TCS for the non-furnishing of PAN. It is seen that while these provisions have served their purpose in ensuring obtaining and furnishing of PAN by various persons, there is a need to have similar provisions to ensure the filing of return of income by those persons who have suffered a reasonable amount of TDS/TCS.
Hence, it is proposed to insert a new section 206AB in the Act as a special provision providing for a higher rate for TDS for the non-filers of income-tax returns. Similarly, it is proposed to insert section 206CCA in the Act as a special provision for providing for a higher rate of TCS for non-filers of the income tax returns.
Proposed section 206AB of the Act would apply on any sum or income or amount paid, or payable or credited, by a person (herein referred to as deductee) to a specified person. This section shall not apply where the tax is required to be deducted under sections 192, 192A, 194B, 194BB, 194LBC or 194N of the Act. The proposed TDS rate in this section is higher of the followings rates:-
Proposed section 206CCA of the Act would apply on any sum or amount received by a person (herein referred to as collectee) from a specified person. The proposed TCS rate in this section is higher than the following rates:-
The specified person is a person who has not filed the returns of income for both of the two assessment years relevant to the two previous years which are immediately before the previous year in which tax is required to be deducted or collected, as the case may be. Further the time limit for filing tax return under sub-section (1) of section 139 of the Act has expired for both these assessment years. There is another condition that aggregate of tax deducted at source and tax collected at source in his case is rupees fifty thousand or more in each of these two previous years. Specified person shall not include a non-resident who does not have a permanent establishment in India
Consequential amendment is proposed in sub-section (4) of section 194-IB of the Act
This amendment will take effect from 1st July, 2021.
Section 206AA of the Act provides for a higher rate of TDS for the non-furnishing of PAN. Similarly, section 206CC of the Act provides for a higher rate of TCS for the non-furnishing of PAN. It is seen that while these provisions have served their purpose in ensuring obtaining and furnishing of PAN by various persons, there is a need to have similar provisions to ensure the filing of return of income by those persons who have suffered a reasonable amount of TDS/TCS.
Hence, it is proposed to insert a new section 206AB in the Act as a special provision providing for a higher rate for TDS for the non-filers of income-tax returns. Similarly, it is proposed to insert section 206CCA in the Act as a special provision for providing for a higher rate of TCS for non-filers of the income tax returns.
Proposed section 206AB of the Act would apply on any sum or income or amount paid, or payable or credited, by a person (herein referred to as deductee) to a specified person. This section shall not apply where the tax is required to be deducted under sections 192, 192A, 194B, 194BB, 194LBC or 194N of the Act. The proposed TDS rate in this section is higher of the followings rates:-
- twice the rate specified in the relevant provision of the Act; or
- twice the rate or rates in force; or
- the rate of five per cent
Proposed section 206CCA of the Act would apply on any sum or amount received by a person (herein referred to as collectee) from a specified person. The proposed TCS rate in this section is higher than the following rates:-
- twice the rate specified in the relevant provision of the Act; or
- the rate of five per cent
The specified person is a person who has not filed the returns of income for both of the two assessment years relevant to the two previous years which are immediately before the previous year in which tax is required to be deducted or collected, as the case may be. Further the time limit for filing tax return under sub-section (1) of section 139 of the Act has expired for both these assessment years. There is another condition that aggregate of tax deducted at source and tax collected at source in his case is rupees fifty thousand or more in each of these two previous years. Specified person shall not include a non-resident who does not have a permanent establishment in India
Consequential amendment is proposed in sub-section (4) of section 194-IB of the Act
This amendment will take effect from 1st July, 2021.
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