Not filing Income Tax Return? Be ready to pay higher TDS from next month
From next month, a higher Tax Deducted At Source (TDS) rate would be applicable for Income Tax Return (ITR) non-filers, according to the Finance Act, 2021. So, if a taxpayer has not filed TDS in the last two years and TDS deducted each year exceeds ₹50,000, the tax department will charge more while filing the ITR from July 1.
“In the last budget, a new section 206AB was introduced to deduct a higher rate of TDS in the cases where income tax return not filed for the last two previous years and the TDS deducted in each of these two previous years exceeds ₹50,000. Basically, Government wants to ensure the filing of return of income by those people who have suffered a reasonable amount of TDS/TCS,” said Abhishek Soni, Co-Founder and CEO, Tax2win.in.
New TDS rule
The rate of TDS will be higher than the below limits
- Double the rate specified in the relevant provision of the Income Tax Act or
- Double the rate or rates in force or
- At the rate of five per cent.
Where new TDS rule will not apply
“The provisions of this section will not be applicable if the total TDS deduction in each previous year is less than ₹50,000 or you are filing your income tax return regularly for the last 2 years,” aid Abhishek Soni.
Further, if TDS is to be deducted on salary income (192), lottery(194B), horse race (194BB), PF (192A), trust income(194LBC), and on cash withdrawals (194N), then the provisions of this section will not apply. Also, a higher rate of TDS is not applicable in the case of NRI who does not have any permanent establishment in India, he added.
The Central Board of Direct Taxes (CBDT) has extended the deadlines to file income tax returns for the financial year 2021. The last date of filing Tax Deducted at Source (TDS) for the fourth quarter of the financial year 2020-21 has been extended to June 30, according to the circular.
Never miss a story! Stay connected and informed with Mint.
our App Now!!
We are now on Telegram. Click here to join our channel (@TechiUpdate) and stay updated with the latest Technology headlines.
For all the latest Business News Click Here