Income Tax Department has evolved a system to collect TDS at higher rates from next month. This arrangement is for Tax Deduction at Source (TDS) and Tax Collection at Source (TCS). Through this, it will help in identifying individuals to charge income tax at a higher rate from July 1. Such a provision has been made in the budget for the financial year 2020-21.
It is noteworthy that in this year’s budget provision has been made that tax deducted at source and tax collection at source will be at a higher rate in case of those who have not filed income tax returns in the last two financial years, which will be taxed at a higher rate in each of the two years. 50,000 or more makes a tax deduction.
The Central Board of Direct Taxes (CBDT) issued a circular in this regard. It contains information about the implementation of Section 206AB and 206CCA for deduction/collection of tax at a higher rate in case of non-filing of income tax returns.
The Income Tax Department has told through Twitter that “A new system has been issued for compliance check for Section 206AB and 206CCA. This will reduce the compliance burden for the deductor of tax at source and the collector of TCS. There may be a burden. The board said the new regime – ‘compliance checks for sections 206AB and 206CCA’ – will reduce this compliance burden on them.
Under the new system, the TDS or TCS collector has to enter the PAN of that payer or TCS debtor in the process to find out whether he is a “special person” or not.
