New TDS Rules from July 1
A new Tax Deducted at Source (TDS) rule is coming into effect from July 1, 2021.
What are those new rules?
- Under the new rules, non-filer of income tax for past two financial years will be subjected to higher taxation. TDS or TCS will be charged at double rate specified in relevant provision of Income Tax Act or 5 per cent.
- Provisions of this section will be applicable to TDS deductions on resident payments including shareholder dividends and service payment to vendors rent.
- However, it will not be applicable on salary, winnings from lottery or crossword, horse race, trust income and cash withdrawals.
- Such non-filers will bear higher tax deducted at source (TDS) and tax collected at source (TCS).
- Higher tax will be levied on them if such tax deduction will amount to Rs 50,000 or more in each of past two years.
Who will enforce these rules?
Central Board of Direct Taxes (CBDT) has introduced a utility tool called Compliance Check for Section 206 AB & 206 CCA, to enforce these new rules. This tool will ease compliance burden of tax deductions who will use this functionality to identify non-filers. This functionality is already functioning on reporting portal of income tax department.
Benefits of the tool
Tax deductor would be able to conduct a single PAN (permanent account number) search or bulk search with the help of Compliance check tool. For a single search, deductor can get income tax return filing information about specific person on portal. This information can be downloaded in PDF format. Tax deductor can also get bulk search involving multiple PANs. To enable this service, tax deductors & collectors would be required to check functionality of PAN of vendor from whom TDS is to be deducted.
Month: Current Affairs - July, 2021
Category: Economy & Banking Current Affairs
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