- Check the new rule introduced by CBDT related to TDS and TCS.
- The rate of TDS will be doubled if you haven’t filed a return in the last two assessment years.
- This rule will be effective from the 1st of July 2021.
The Budget 2021 has brought certain provisions that have mandated that non-filers of income tax for the past two fiscal years would have to face a higher tax deduction at source if the tax deduction was ₹50000 or more in each previous years. The Income Tax Department has also introduced a new unit to help the TDS deductors and TDS Collectors identify the people on whom the high tax rate will be charged. Therefore the income tax charged from the third year could be more and this rule will come into effect from the 1st of July 2021. This rule was issued in a circular by the Central Board of Direct Taxes on the implementation of Section 206AB and Section 206CCA concerning a high tax deduction for non-filers.
Points to Remember
- A high rate of TDS will apply to the non-filers of the ITR.
- People who haven’t filed the ITR for the last two fiscal years will face a high rate of TDS.
- If the amount of the TDS is INR 50000 or more each year then a high TDS will be levied.
- This provision was bought in Budget 2021.
- This rule will be in effect from the 1st of July 2021.
- The IT Department has also introduced a new utility to identify the “Specified Person” (non-filers) on whom the tax will be levied.
- The IT Department has made a list in the financial year 2020-21 that comprises of the Specified Person who didn’t file a return of income for the assessment year 2018-19 and 2019-20 and have aggregate TDS and TCS of ₹50000 or more in every two years.
- The Income Tax Filing date has been extended to the 30th of September 2021.
- The TDS rate will be doubled if you haven’t filed any return in the last two financial years.
TDS on Various Income
- Savings Bank Account interest has a TDS Rate of 10% with a threshold of ₹40000 for non-senior citizens and ₹50000 for Senior Citizens.
- The insurance commission has a TDS Rate of 5% with a threshold of ₹15000.
- Rent on Building, Land, and Furniture has a TDS Rate of 5% to 10% with a threshold of ₹2.4 Lacs.
- The TDS Rate on the Transfer of immovable property is 1% with a threshold of ₹50 Lacs.
- Professional Service fee has a TDF Rate of 2% to 10% with a threshold of ₹30000.
- The TDS rate on dividends is 10% with a threshold of ₹5000.