Not filing Income Tax Return? You may have to pay double TDS from next month – Here’s why

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New Tax Deducted At Supply (TDS), TCS Charges for Non-filers from July 1: Increased TDS/TCS price can be relevant for Earnings Tax Return (ITR) non-filers from July 1, in response to the Finance Act, 2021. The Finance Act has broadened the scope for assortment of tax from the very supply to make sure correct revenue reporting by each assessee.

With impact from July 1, 2021, an individual should pay TDS at a better TDS price if he/she has not filed Earnings Tax Returns for the final two years and has mixture TDS/TCS credit score of Rs. 50,000 or extra in every of the 2 years.

New TDS Charge

Below Part 206AB of the Earnings Tax Act 1961, the brand new TDS price levied can be the very best of:

– Double the speed specified within the related provision of the Earnings Tax Act; or
– Double the speed of charges in power; or
– On the price of 5 per cent.

For TCS assortment, the speed underneath part 206CCA of the Act will likely be larger of: Double the speed specified within the related part; or 5 per cent.

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The place new rule won’t apply

Part 206AB of the Act won’t be relevant for TDS deducted underneath sections 192 (Wage); 192A (Fee of accrued stability on account of an worker); 194B (Winnings from lottery or crossword puzzles); 194BB (Winnings from horse race); 194LBC (Earnings from funding in securitization belief); and 194N (Money withdrawals).

Part 206AB can even not be relevant to non-resident deductee/collectee, who don’t have a everlasting institution in India.

If each part 206AA (larger TDS price in case of no PAN) and part 206AB of the Act are relevant, then the TDS price relevant will likely be larger of the TDS charges in response to the aforesaid sections. Additionally, within the case of TCS, larger of TCS charges as per part 206CC and part 206CCA of the Act will likely be relevant.