TDS: Income Tax Department has prepared a new system for deducting TDS (tax deducted at source) and collecting TCS (tax collected at source). Through this, it will be easy to identify those ‘specified persons’ who have not filed returns, who will be taxed at higher rates from July 1. This will reduce the compliance burden.
Tax deducted at source and collection at source will be at a higher rate in the case of those who have not filed income tax returns in the preceding two financial years from July 1, on which tax deduction of Rs 50,000 or more is made in each of the two years. Its provision has been made in the budget for the financial year 2021-22. Under the new system, TDS deductors and TCS collectors will only have to check the PAN of the concerned entity at the new facility created at the beginning of the financial year.
The Central Board of Direct Taxes (CBDT) on Monday issued a circular regarding implementation of sections 206AB and 206CCA for deduction/collection of tax at higher rates in case of non-filers of such returns. The CBDT said in a statement on Tuesday that in order to implement both these provisions, it was necessary to deduct TDS or collect TCS, to satisfy themselves that the payee/collector is a ‘recipient’. the specified person or not. This resulted in an additional burden of compliance on such tax deductor/collector.
According to the department, “To reduce this compliance burden, the Central Board of Direct Taxes has introduced a new facility for compliance checks for Section 206AB and 206CCA.” has started. This facility is already being provided through the Income Tax Department’s reporting portal (https://report.insight.gov.in).” TDS deductor or TCS receiver concerned entity a PAN (PAN search) on the portal or enter more than one PAN (Bulk Search) and if the payee/collector is a ‘specified person’, he/she can get the relevant response or reply through this facility. As per the statement, “this new system will reduce the compliance burden for those deducting TDS or collecting TCS.
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The Income Tax Department has prepared the list of ‘Special Persons’ by the beginning of 2021-22. While preparing this list, the last two respective years, 2018- 19 and 2019-20, have been taken into consideration. This list contains the names of taxpayers who have not filed returns for assessment years 2019-20 and 2020-21 and their total TDS and TCS of Rs 50,000 or more in each of these two years. According to the statement, through this new facility, the government has reiterated its commitment to reduce the compliance burden of the taxpayers.