The finance ministry has come up with a new rule, in the Union Budget 2024 section. As per it, the Tax Deducted At Source (TDS) deduction will be at higher rates for the non-filers. “206AB section was newly introduced during the Budget 2024 to deduct the TDS highly in certain nature of income cases”, said Abhishek Soni, who is a CEO and Co-founder of Tax2win. The taxpayers of certain categories are required to pay TDS at higher rates, from July month.
Who needs to pay TDS at higher rates?
If anyone has not filed their Income Tax return (ITR) in the last 2 years and if the total TDS is more than 50000 rupees every year then they have to pay the TDS at a higher rate from this month.
New TDS Rate
The Central Board of Direct Taxes (CBDT) said that the TDS rate will be either twice the rate specified in the relevant section or 5%. Whatever the highest, that will be applicable
Know you need to pay higher TDS or not
Both the tax collector and deductor can know whether they are supposed to pay TDS at the higher rate. Recently “Compliance check for Sections 206AB & 206CCA” has unveiled by the income tax regulator, to ease the tax deductors burden.
How will it work?
The CBDT mentioned, “The tax collector or deductor can feed PAN of them and can get the response from the functionality, whether they are in the specified listing.” That functionality is available in the Income-tax department’s reporting portal, CBDT further added.
If the PAN search is single, on the screen itself you can see the result and download it as well. In the case of bulk search, only downloading of the result is available.
How Income Tax department is preparing TDS Non-filers list
At the starting of the 2024-22 financial year, a list is prepared by the income tax department, by considering the previous years, 2018-19, 2019-20. The list consists of taxpayers’ names, who did not file their income returns, and having the aggregate TDS of Rs. 50000/- or more of it, in those two previous years. By following the CBDT norms, at the starting of each financial year, a new list will be prepared.
Section 206AB will not be applicable for the below transactions
Section 206AB is not applicable in case the TDS is deducted for salary or for withdrawal from the PF, under sections 192 and 192A. Winning lottery, crossword, card game, puzzle, horse game, or any other games under section 194B, 194BB have not come under new rules. If the cash withdrawal is more than Rs 1 crore under section 194N then new rules are not applicable. There is an exemption for the NRIs if they are not having a permanent establishment in India.
