A new tax rule relating to the TDS and TCS has come in to force from 01.07.2021 under which the the taxpayers who has not filed their Income Tax Returns for the past two Financial Years shall have to pay higher tax. It is important to note here that the Income Tax Department had introduced two new sections namely Section 206AB and Section 206CCA with a purpose of deducting TDS at a higher rates for certain non-filers. Also, the Income Tax Department has introduced a tool named Compliance Check Functionality for Online Utility.
New TDS / TCS Provisions w.e.f. 1st July, 2021
Know more: New Provisions of TDS on Purchase of Goods
Applicability of the new provisions for TDS / TCS
Who are the Specified Persons?
Higher rate of TDS
The new rate will be higher of the following rates:
CBDT’s tool to check compliance
To help the taxpayers of TDS and TCS to follow the Compliances of these sections, the IT Department has introduced a new “Compliance Check Functionality for Section 206AB and 206CCA”. This new tool enables the tax deductors / collectors to verify the specified person as defined in the Finance Act, 2020. It is expected that this functionality will east the compliance burden on taxpayers. However, this tool is already functioning through the reporting portal of the IT department.”
How to check Compliance Functionality for Section 206AB & 206CCA?
The Tax Deductors can now check whether or not an individual has filed returns or not on the official website of the Income Tax Department. There is a utility available on the reporting portal where by entering the PAN number, the deductors will be able to check the last return filed by an individual.
It is important to note here that the burden of compliance is on the the person, who may be a prompt filer of returns deducting the tax. CBDT quotes to these effects that “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 the reporting portal of the income tax department.”