Income Tax Department has developed a new system for TDS deductors and TCS collectors. With this, information will be available for both of those special people on whom TDS is to be levied at higher rates from July 1 next month. In Budget 2021, Finance Minister Nirmala Sitharaman introduced a provision regarding TDS and TCS rates. Under this, people who have not filed Income Tax Return (ITR) in two previous years and had tax deduction of more than 50 thousand every year in both these years, then TDS and TCS will be taken at higher rates than those. To identify such people, the Income Tax Department has prepared a new system.
TDS will be deducted at higher rates and there may be interruption in banking services, if this important work is not done this month
Identification of ‘Specified Person’ is essential
The Central Board of Direct Taxes (CBDT) on Monday issued a circular regarding implementation of section 206AB and section 206CCA for tax deduction/collection at higher rates. According to CBDT, it is necessary for the TDS deductor or TCS collector to identify the specified person whether tax is to be deducted/collected at higher rates or at normal rates because if he has deducted/collected tax at higher rates than the specified person. If not, then its burden will fall on them. This problem will be avoided with the new feature ‘Compliance check for sections 206AB and 206CCA’.
CBDT issues Circular No. 11 of 2021 dt 21.06.2021 on implementation of section 206AB & 206CCA wrt higher tax deduction/collection for certain non-filers. New functionality issued for compliance checks for sec 206AB & 206CCA to ease compliance burden of tax deductors/collectors. pic.twitter.com/1DP39BKVZi
— Income Tax India (@IncomeTaxIndia) June 21, 2021
Complete information will be available through PAN
Through this new functionality, the TDS deductor/collector will get the information of the specified person easily. For this, they just have to fill the PAN of the deductee or collector and then they will know whether such a person is a Specialized Person or not. The Income Tax Department has prepared a list of Specialized Persons for the last two financial years 2018-19 and 2019-20 at the beginning of the financial year 2021-22 itself. This list contains the names of all those taxpayers who have not filed ITR in assessment year 2019-20 and 2020-21 and in both these years TDS or TCS is 50 thousand rupees or more every year.
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