TDS New Rule: If you have not filed income tax return in the past, you may have to pay more Tax Deducted at Source (TDS) from July 1. For those who do not file their IT returns, the new TDS rate will be double. A portion is directly deducted as tax for making the payment. This is done to convey the details of the transactions to the Income Tax Department.
Who will have to pay more TDS?
Till now more TDS was deducted only for those who do not have PAN. But now if you have not filed tax return, then TDS will be deducted in that case also. Let us know which payments will be affected and how.
Officially, this rule will come into effect from July 1. To avoid double TDS, you have to note that you have filed tax returns for the last two years. The new section 206AB will be applicable only when the due date for filing tax returns for the previous years under section 139(1) is over.
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Now the question arises that which payment will be affected. TDS is deducted on dividends, interest on fixed deposits, service payments, rent on the property or before the sale of your property. If you have not filed your tax return in the last two years, then double the TDS rate will be applicable. Those deducting TDS will have to enter their Permanent Account Number (PAN) and your information will be revealed. If you have not filed tax return, the rate will be deducted according to the individual transaction.
However, income from salary and some other income is exempted from this rule. Provident fund payment will also be excluded.