Income Tax Return- TDS Rules Has Changed; Applicable From This Month
- ByStartupStory | July 3, 2021
During Union Budget 2021, the finance minister Nirmala Sitharaman has announced a new rule to deduct Tax Deducted at Source (TDS) at higher rates for non-filers. “In Budget 2021, a new Section 206AB was introduced to deduct TDS at a higher rate on cases with certain nature of income,” said Abhishek Soni, co-founder, and chief executive officer, Tax2win. Starting from July, some taxpayers need to pay TDS at higher rates if they come under a certain category. Who has to Pay TDS at Higher Rates? Those taxpayers who have not filed Income Tax Return (ITR) for the last two years and the total amount TDS surpass Rs 50,000 in each year, then need to pay TDS at a much higher rate from July.
New Rate of TDS, The Central Board of Direct Taxes (CBDT) said, the rate of TDS will be either twice the rate mentioned under the relevant section or provision or five percent, whichever is higher. The tax collector or tax deductor can check whether a person is liable to pay TDS at a higher rate from this month. The income tax regulator has recently unveiled a new functionality “Compliance check for Sections 206AB & 206CCA” to ease the burden on the tax deductors. “The tax deductor or the collector can feed the single PAN (PAN search) or multiple PANs (bulk search) of the deductee or collected and can get a response from the functionality if such deductee or collected is a specified person,” the CBDT mentioned. This functionality is made available through the reporting portal of the Income-tax department, it further added.
How Income Tax Department will differentiate TDS Non-Filers The tax department has prepared a list for non-filers as of the start of the financial year 2021-22, taking previous years 2018-19 and 2019-20 previous years. The list contains names of taxpayers who did not file a return of income for both assessment years 2019-20 and 2020-21 and have an aggregate TDS of Rs 50,000 or more in each of these two previous years. A fresh list will be prepared following all the norms mentioned by CBDT at the start of each financial year. The tax department will not include any new names on the list during the financial year 2021-22. “The deductor or the collector may check the PAN in the functionality at the beginning of the financial year and then he is not required to check the PAN of a non-specified person during that financial year,” said CBDT.
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