The income tax department has designed and developed a new functionality ‘Compliance check for sections 206AB and 206CCA‘ that shall ease the compliance burden. The income tax department has released a circular regarding this issue. Help tax deducted at source (TDS) deductors and a tax collected at source (TCS) collectors identify/pinpoint those ‘specified persons’ on whom the higher rate of taxes shall be levied from July 1.
The Central Board of Direct Taxes (CBDT) has issued a circular associated with the implementation of Sections 206AB and 206CCA for higher tax deduction/collection for certain non-filers.
“CBDT issues Circular No. 11 of 2021 dated 21.06.2021 on implementation of section 206AB & 206CCA wrt higher tax deduction/collection for certain non-filers. New functionality issued for compliance checks for sec 206AB & 206CCA to ease the compliance burden of tax deductors/collectors,” the income tax department tweeted.
The CBDT further said that since the TCS collector or TDS deductor shall be required to undertake due diligence on whether the collected or deductee is a ‘specified person’, this may lead to an extra compliance burden on them.
The CBDT further commented that the aforesaid new functionality — ‘Compliance check for sections 206AB and 206CCA’ — shall ease the compliance burden.
“Through the use of this functionality, the TCS collector or TDS deductor can input PAN of the deductee or collectee on the said functionality and can identify whether the deductee or collectee is a ‘specified person’.”
Initially, The Budget 2021 had made a provision mandating that non-filers of income tax returns for the previous two fiscal years shall be subjected to higher TCS and TDS rates if such tax deduction would be Rs 50,000 or more in each of those two years.
