My friend if you have not filed an Income Tax Return or ITR for the fiscal year 2020-21 then you have been separated from others and are on the list of Non-Tax Filers, get ready to face high Tax Deduction At Source or TDS from this financial year.
ITR Rules From Central Board of Direct Taxes (CBDT)
The Central Board of Direct Taxes (CBDT) has issued a circular under sections 206AB and 206CCA of the Income-tax Act, 1961 to identify the non-tax filers who are now subjected to higher TDS deductions from April 1, 2022.
As per the circular, the subjected individuals are:
- A person who has not filed the income tax return for the two relevant assessment years before the year in which the tax was supposed to be deducted. The two previous years will be considered for those tax filers whose submission date has expired under sub-section ( I) of section 139.
- The sum of tax deducted and collected at the source will be more than fifty thousand in both the two previous years.
Well, in the list of 2022-23 no names were included in each list of these two years.
As Per The Circular
The circular asserted, “This is a taxpayer-friendly measure to reduce the burden on tax deductor and collector of checking PANs of non-specified person more than once during the financial year.”
The name will be removed from the specified list if a person files the legitimate return of income for the assessment year 2020-21 in the fiscal year 2022-2023. The final step of removing the name will be done on the date of filing of valid income return in the financial year 2022-23.
Further said, “Also the provisions of section 206AB will not apply in case of deduction of tax on the transfer of virtual digital asset (YDA) under section 1945 of the Act to a person being an individual or Hindu undivided family, whose sales, gross receipts or turnover from the business carried on by him or profession exercised by him does not exceed one crore rupees in case of business or fifty lakh rupees in case of the profession, during the financial year immediately preceding the financial year in which such YDA is transferred or if such person does not have any income under the head ‘Profit and gains of business or profession’.”
About Section 206 AB and 206 CCA
Section 206 AB, provides high TDS, usually, the rate is higher in comparison to the prescribed act at the time when the payment is collected from those who have filed an ITR.
section 206 CCA, it provides the accumulation of TCS or tax collected at source on the amount collected from buyers at a higher rate than mentioned in the Act.