Know the new TDS Rules effect from July 1, 2021. Non-filers will face higher fines than in the current fiscal year, which has already started from April 1, 2021. The Finance Act 2021 recently passed in Parliament has a special provision for deduction of withholding tax for non-source income tax return filers.
Insert a new section '206AB in place of section 206AA (I) have been added under the special section. Also, if one does not have a PAN, the tax exemption limit will be higher." As per the budget of the Finance Minister, the new TDS rule will come into force in July 2021. As a result, it is proposed to add a separate section 206AB as a special section of the Act which allows higher TDS rates for income tax non-filers.
You may also, like- Automated Income Tax Revised Form 16 Part A&B for the F.Y.2020-21 which can prepare at a time 50 Employees Form 16 Part A&B with new and old tax regime[Who are not able to download the Part A from the TRACES PORTAL they can use this Excel Utility)
Similarly, Section 206CCA has been added to the Act as a special section to allow a higher TCS rate for non-filers of income tax returns. The new clause shall apply to any amount payable by a person, payable, or credited to a particular person (referred to herein as a waiver). The rate of TDS should be higher than below i.e. double the rate as described in the applicable section of the Income Tax Act or double the existing rate or rate or 5% TDS.
The new provision was enacted to enable persons subject to the new rules to file their income tax returns.
This will allow more people to file ITRs and improve government accountability. The below-mentioned taxpayers will be affected by the present provision: Non-filers who have paid TDS or TCS of Rs. 50,000 or more in the last two years but have not filed income tax return will be subject to the new provision (ITR).
You may also, like- Automated Income Tax Revised Form 16 Part A&B for the F.Y.2020-21 which can prepare at a time 100 Employees Form 16 Part A&B with new and old tax regime[Who are not able to download the Part A from the TRACES PORTAL they can use this Excel Utility)
According to the Finance Act, if the provisions of section 206AA are applicable to a single person, in addition to the provisions of this section, more than the two rates given in this section and section 206AA will be deducted. Non-residents who do not have permanent residence in India have been exempted from the new rules.
If the pan is not equipped
If the specified person fails to provide the PAN to the payable person in addition to not filing the income tax return within the due date, the TDS rate will be higher or 20% higher than the above rate.
In the case of payment of TDS to certain persons, the present rule allows the issuers to verify the following three points at a time: 50,000 if the person responsible for TDS files his tax return for the last two years.
You may also, like- Automated Income Tax Revised Form 16 Part B for the F.Y.2020-21 which can prepare at a time 50 Employees Form 16 Part B with a new and old tax regime
The deadline for filing original returns has expired for the previous two years. No higher tax deduction is required for any payment if the due date for filing ITR for any one year does not expire. Consequently, when the provider identifies these results in the third year, the tax should be withheld at a higher rate than previously mentioned.
As a result, the TDS rate should be 5% which is more than 2% of 1%. Moreover, if the person fails to deliver his pan payable, TDS will be deducted at the rate of 20%, which is higher than the rate of 5% or 2%.
What are sections 206AA and section 194N? Under Section 206AA, TDS is levied on payments made to non-residents and residents who do not have a PAN.
It was implemented in the financial year 2010-11 and it allows the taxpayer to provide their PAN to any taxpayer earning taxable income. Taxpayers who have not filed any return for three years have been issued Section TDS No. 194 for withdrawal of cash above Rs. 20 lakhs. 2% TDS is deducted under this section when withdrawing more than Rs. 20 lakhs.
