ITR NON-FILERS Status

HIGHER RATE OF TDS/TCS IN CASE OF INCOME TAX RETURN(ITR) NON-FILER The Finance Act, 2021 inserted new Sections 206AB and 206CCA in the Income Tax Act, with effect from 1st July 2021, as a special provision for the deduction of higher rates of TDS and TCS, respectively for the non-filers of an income tax return.

The Non -Filers are persons who satisfies the following conditions:

• A person who has not filed the Income Tax Return for two previous years immediately prior to the previous year in which tax is required to be deducted
• The time limit of filing return of income under sub-section (1) of section 139 is expired; and
• The aggregate tax deducted at source or tax collected at source, as the case maybe, is Rs. 50,000 or more in each of the two previous years.

Rate of deduction under Section 206AB/206CCA

• The applicable TDS / TCS rate if the amount is paid/ credited /collected to/ from a Non-filer being higher than the below rates:
• at twice the rate specified in the relevant provision of the Act; or
• Twice the rate /rates in force; or
• The rate of 5%.

Thus, it is pertinent to have a valid pan & income tax return non filer status to ascertain the rate at which TDS/TCS is to be deducted.