The Income Tax Department has developed a new mechanism to help those who deduct TDS and collect TCS to identify those individuals who will be taxed at a higher rate from July 1.
income tax department
The Income Tax Department said that it has developed a new system for deducting TDS and collecting TCS to help identify those individuals who will be taxed at a higher rate from July 1. A provision has been made in the budget for the financial year 2020-21 that tax deduction at source and tax collection at source will be at a higher rate in the case of those who have not filed income tax returns in the last two financial years. But tax deduction of Rs 50,000 or more is made in each of the 2 years.
The Central Board of Direct Taxes (CBDT) has issued a circular regarding the implementation of Section 206AB and 206CCA regarding tax deduction / collection at a higher rate in the case of such people who do not file returns. The Income Tax Department has written on Twitter, a new system has been issued for compliance check for Section 206AB and 206CCA. This will reduce the compliance burden for the tax deductor and TCS collector at source.
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
The CBDT said that since the deductor of TDS or the collector of TCS would need to take due care and action regarding the identity of the individual, it may lead to additional compliance burden on them.
Compliance burden will be less with the new system
The board said the new regime – compliance checks for sections 206AB and 206CCA – will reduce this compliance burden on them. Under the new system, the TDS or TCS collector has to enter the PAN of that payer or TCS debtor in the process, from which it will be known whether he is a specific person or not.
Prepare a list of such taxpayers
The Income Tax Department has prepared the list of specified person in the beginning of 2021-22. While preparing this list, the last 2 respective years, 2018- 19 and 2019-20, have been taken into consideration. This list contains the names of taxpayers who have not filed returns for the assessment years 2019-20 and 2020-21 and their total TDS and TCS in each of these two years is Rs 50,000 or more.
read this also- RBI imposed heavy penalty on these 3 cooperative banks, do you have an account?