Personal Finance
It may be noted that the I-T department had introduced a new Section 206AB in the Budget 2021 to deduct TDS at higher rates for certain non-filers.
Updated : Jun 30, 2021, 03:52 PM IST | Edited by : Karishma Jain
A new tax rule is coming into effect from tomorrow, July 1, 2021 under which income taxpayers who haven't filed their income tax returns for the past two fiscal years will be subjected to higher taxation.
It may be noted that the Income Tax department had introduced a new Section 206AB in the Budget 2021 to deduct TDS at higher rates for certain non-filers.
Such non-filers will have to pay a higher tax deducted at source (TDS) and tax collected at source (TCS). However, there are certain provisions on who will be subject to the new rule.
Who will pay higher TDS and TCS?
According to the Central Board of Direct Taxes (CBDT), taxpayers who haven't filed their income tax returns for the last two financial years, i.e. the fiscal year 2018-2019 and fiscal year 2019-2020, will have to pay higher TDS and TCS if such deductions were Rs 50,000 or more in each of the two financial years.
The rate of TDS will be either twice the rate specified under the relevant section or provision or five per cent, whichever is higher.
Who all are exempted from higher TDS?
Higher TDS for non-filers won't apply on TDS deducted on salary income, PF, lottery, cash withdrawals, horse race, and trust income, among others. A higher rate of TDS is also not applicable in the case of a non-resident Indian (NRI) who does not have any permanent establishment in India.
CBDT's tool to check compliance
To enforce the rule, the CBDT has introduced a utility tool, known as the Compliance Check for Section 206AB & 206CCA. The tool will ease the compliance burden on taxpayers.
CBDT said, "To ease this compliance burden, the Central Board of Direct Taxes has issued a new functionality. Compliance Check for Sections 206AB & 206CCA. This functionality is already functioning through reporting portal of the income tax department."
TDS filing deadline extended
The Central Board of Direct Taxes (CBDT) has recently extended various deadlines related to income tax to provide some relief in the wake of second wave of coronavirus outbreak. Now taxpayers will have time till July 15 to file the TDS for the last quarter of financial year 2020-21.