Budget 2022 included a proposal related to Income Tax Return. It states that if you have not filed your income-tax return for one year, then you will have to pay more TDS. Earlier this window was of two years. But, it has a hitch. Let us know about it in detail.
The deadline for filing income tax return for income earned in the financial year 2021-22 will be July 31 (if the deadline is not extended) 2022. This means that if you have not filed the return for the income earned in the financial year 2020-21, then you can file the return till July 2022 to avoid paying more TDS.
What is TDS?
If you pay rent, sell property or get interest on dividend or fixed deposit, then 1 to 20 per cent of the amount will be deducted. This amount is called TDS. To increase the number of people filing returns, the government had doubled the TDS for those who did not file returns for the last two years.
Sudhir Kaushik, Co-Founder, Taxspanner.com says, “The government has introduced this proposal to widen the tax-base and reduce the number of people who do not file returns. Increasing TDS will increase awareness among people to file returns. Those who do not file returns will have to suffer.”
This rule will be applicable to such people whose total TDS liability is more than Rs 50,000 annually and it will not be applicable to salary income. TDS is applicable on non-resident Indians and high-value sales also.
The change in the rule seems to have cut the time for tax filing in half, but in reality the time has come down drastically. This is because of the difference between the financial year and the assessment year. Paras Savla, partner, KBP & Associates said, “This proposal in the budget has been linked to the provisions of section 139-1. This means that if you do not file the return by the stipulated time, you will have to pay more TDC.”
For example, if you do not file your income tax return for assessment year 2022-23 by July 31, 2022 and you have to pay rent in August 2022, you will have to deduct double TDS, as you did not file the previous year’s return. Is. This means that you will have to file the return by the due date or pay TDC at double rate.
There are practical difficulties in implementing this provision of Budget 2022, as every company uses software to keep track of tax filing status. Savla said, “After the two-year window was introduced last year, we used to check the compliance tracker once a year. Then we used to calculate the TDS percentage based on the tax-filing status. Now we have to check the real time status and Additional checks and balances will have to be introduced. Multiple fields will have to be filled repeatedly to know the TDS liability on each payment.”
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