The Tax Publishers

Finance Bill,2021--TDS/TCS

Higher Rate of TDS and TCS forNon Filers of Return of Income

CA. Nisha Bhandari

The Finance Bill, 2021 has proposed to insert two newsections 206AB and section 206CCA in the Income Tax Act as a special provisionproviding for higher rate for TDS and TCS for the non-filers of income-taxreturn. The learned author analyses the proposed amendment in the presentwrite-up.

1. Insertion of new sections 206AB and206CCAReason thereof

For the purpose of discouraging the practice of non-filingof income-tax returns by the person in whose case substantial amount of tax hasbeen deducted or collected, higher rate of TDS and TCS has been proposed by theFinance 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 206AB notwithstanding anything contained in any other provisions of theAct, where tax is required to be deducted at source under the provisions ofChapter XVIIB, other than sections 192, 192A, 194B, 194BB, 194LBC or 194N onany sum or income or amount paid, or payable or credited, by a person to aspecified person, the tax shall be deducted at the higher of the followingrates, namely :--