New Rule for TDS
From
July 1, a number of changes for bank account holders and
taxpayers took effect. Non-filers of income tax returns for the
previous two fiscal years will face a higher tax deducted at source (TDS) and
tax collected at source (TCS) rate from July 1 if the tax deduction
was Rs 50,000 or more in each of those two years.
The Central
Board of Direct Taxes (CBDT) has released a new tool called "Compliance
Check for Sections 206AB & 206CCA" to help with this compliance burden
and help tax diductors keep track on non-filers. This feature is currently
available through the income tax department's reporting site
(https://report.insight.gov.in)," according to the CBDT.
How does
this new tool function?
i) Single PAN search:
A tax diductor or collector can enter the deductee's
or collectee's single PAN (PAN search) into the portal and receive a response
from the functionality whether the deductee or collectee is a specified person.
The result of a PAN search will be displayed on the screen and can be
downloaded in PDF format.
Bulk
search: The tax deductor or collector can submit several PANs
(bulk search) of the deductee or coIIectee to the portal and obtain a result.
The CBDT noted that the response for bulk searches would be in the form of a
downloaded file that could be saved for future reference.
Only at the
start of the financial year will TDS deductors and TCS collectors be needed to
validate the functionality of the PAN of the vendor from whom TDS or TCS is to
be deducted or collected.
The tax
department has compiled a list of taxpayers who did not file income tax returns
at the start of the fiscal year 2021-22, based on the previous fiscal years
2018-19 and 2019-20.
Following
the second wave of Covid-19, CBDT recently extended certain income tax dates to
provide some assistance. Taxpayers now have until July 15 to register their TDS
for the final quarter of fiscal year 2020-21.
New TDS
rules
TDS rates
will be higher than below limits.
Double the
rate set forth in the relevant provision of the Income Tax Act or.
Double
the rates in force or rate,
At a rate
of 5% per year.
Where does
the new TDS rules do not apply?
The
provisions of this section will not apply if your total TDS deduction in each
prior year was less than Rs 50,000 or if you have filed your income tax return
on a regular basis for the previous two years.
Furthermore,
if TDS is to be deducted on salary income (192), lottery income (194B), horse
race income (194BB), PF income (192A), trust income (194LBC), and cash
withdrawals (194N), the rules of this section are not applicable.
Furthermore, a higher TDS rate does not apply to NRIs who do not have a
permanent establishment in India.
According
to Budget 2021, non-filers of income tax returns for the past two fiscal years
will face higher TDS and TCS rates if the tax deduction was Rs 50,000 or more
in each of those two years.