CBDT has notified Section 206AB (TDS) & 206CCA (TCS) on 1st July 2021 for deducting a higher rate of TDS & TCS for persons not filed their Income Tax Returns for the last 2 assessment years to which the due date for filing ITR has been expired, provided that this provision will apply only when the TDS & TCS credit of that person during those assessment years are more than Rs. 50,000 each.
The rate of TDS will be: (Higher Rate of the following) – TDS
- 1. 5% (or)
- 2. Twice the original rate specified in the respective sections.
The above provisions are not applicable to:
- ⦁ 192 – TDS on Salary Payments
- ⦁ 192A – TDS on Provident Fund Withdrawals
- ⦁ 194B – TDS on Lottery (or) Crossword Puzzle Payments
- ⦁ 194BB – TDS on Horse Races Winnings
- ⦁ 194LBC – TDS on Income of Investment Securitization Trust
- ⦁ 194N – TDS on Cash Withdrawal
Amendment in Finance Act, 2022 (From 1st April 2022):
CBDT has bought down the conditions to last one assessment year instead of 2, i.e., TDS & TCS has to be deducted at a higher rate as specified above if a person has TDS & TCS credit of more than Rs. 50,000 and doesn’t file his ITR for the last assessment year to which the due date for filing ITR has expired. The higher rate of TDS mentioned above remains the same as before.
List of Sections to which S. 206AB & 206CCA are not applicable:
- ⦁ 192 – TDS on Salary Payments
- ⦁ 192A – TDS on Provident Fund Withdrawals
- ⦁ 194B – TDS on Lottery (or) Crossword Puzzle Payments
- ⦁ 194BB – TDS on Horse Races Winnings
- ⦁ 194-IA – TDS on transfer of Immovable Property other than Agricultural Land
- ⦁ 194-IB – TDS on rent by certain individuals (or) Hindu Undivided Family
- ⦁ 194LBC – TDS on Income of Investment Securitization Trust
- ⦁ 194M – TDS on Payment of Contract, Commission, Professional Charges, or Fees for Technical Services by certain individuals (or) Hindu Undivided Family
- ⦁ 194N – TDS on Cash Withdrawal
Source:
- 1. Provisions of 206AB – up to 31st March 2022 & After 1st April 2022
- 2. Provisions of 206CCA – up to 31st March 2022 & After 1st April 2022
- 3. Other Notifications & Circulars for 206AB & 206CCA – Circular No. 11 of 2021 dated 21st June 2021 & Notification No. 1 of 2021 dated 22nd June 2021 (Directorate of Income Tax – Systems).