Finance Bill, 2021--TDS/TCS
Higher Rate of TDS and TCS for Non Filers of Return of Income
CA. Nisha Bhandari
The Finance Bill, 2021 has proposed to insert two new Sections 206AB and Section 206CCA in the Income Tax Act as a special provision providing for higher rate for TDS and TCS for the non-filers of income-tax return. The learned author analyses the proposed amendment in the present write-up.
1. Insertion of new Sections 206AB and 206CCAReason thereof
For the purpose of discouraging the practice of non-filing of income-tax returns by the person in whose case substantial amount of tax has been deducted or collected, higher rate of TDS and TCS has been proposed by the Finance Bill, 2021 by way of insertion of two new Sections 206AB and 206CCA, w.e.f. 1-7-2021.
2. Higher rate of TDS when applicable
As per sub-section (1) of Section 206ABnotwithstanding anything contained in any other provisions of the Act, where tax is required to be deducted at source under the provisions of Chapter XVIIB, other than Sections 192, 192A, 194B, 194BB, 194LBC or 194N on any sum or income or amount paid, or payable or credited, by a person to a specified person, the tax shall be deducted at the higher of the following rates, namely :--