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IT Department’s Move to Charge Higher TDS for Non-Filers

by | Jun 25, 2021

TDS and TCS changes

According to the Budget 2021, the non-filers of income tax for the last two fiscal year will be subject to a higher TDS (Tax Deducted at Source), and TCS (Tax Collected at Source) rate. It is in case if the tax deduction was 50,000 INR or more in each of those two fiscal years. The mandate will come into practice from 1st July 2021.

To ease the tax deduction process, the Income Tax department of India has come up with a functionality that helps TDS and TCS collectors to identify those “specified persons” or defaulters on whom the higher TDS deduction is to be levied from July 1st. The TDS deductors and TCS collectors will need to check on the functionality of the PAN card of the trader/ individual from whom TDS is to be deducted or TCS is to be collected at the beginning of the financial year.

CBDT’s Declaration

On Monday (21/06/2021), the Central Board of Direct Taxes (CBDT) passed a circular on implementing sections 206AB and 206CCA for a higher tax deduction or collection for non-filers. The Income Tax Department’s tweet reads: 

“New functionality issued for compliance checks for sec 206AB & 206CCA to ease compliance burden of tax deductors/collectors”

How Does it Work?

In a statement made this Tuesday (22/06/2021), the CBDT added, “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 (https://report.insight.gov.in).” 

The TDS deductor or the TCS collector can enter a single PAN search or a bulk search of multiple PANs. He can check whether they are the specified person or the non-filer eligible for tax deduction or collection or not. The PAN search results for a single search will be available in a PDF version and a downloadable file for bulk PAN search for further reference.

This functionality is a welcome relief for tax deductors or collectors since they can check the PAN/s at the very beginning of the financial year and ascertain the specified persons. And, by doing so, they do not have to check the PAN details of non-specified people time and again throughout the financial year. This means the list of specified persons for FY 2021-22 based on the non-filers of FY 2018-19 and FY 2019-20 stands valid for this entire financial year.

(Source: https://www.tribuneindia.com/news/business/i-t-dept-functionality-to-identify-non-filers-on-whom-higher-tds-will-be-levied-from-july-1-272442)

Also Read:

HSN Code Made Mandatory On GST Invoices from 1st April 2021

43rd GST Council Meeting: Relief for Taxpayers and More

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