One of the most important income tax changes that will come into effect from July 1 in India is the change in the rules of tax deducted at source (TDS) and tax collected at source (TCS). From Thursday (July 1) onwards, income taxpayers who haven’t filed their income tax returns for the past two fiscal years will have to pay a higher TDS and TCS. However, there are certain provisions on who will be subject to the new rule.
Who will pay higher TDS and TCS?
According to the Central Board of Direct Taxes (CBDT), taxpayers who haven’t filed their income tax returns for the last two financial years, i.e. the fiscal year 2018-2019 and fiscal year 2019-2020, will have to pay higher TDS and TCS if such deductions were Rs 50,000 or more in each of the two financial years.
CBDT has already prepared a list of taxpayers who will have to pay higher TDS and TCS from tomorrow (July 1). The list includes the names of all taxpayers who failed to file their income tax returns for FY19 and F20.
Where TDS hike won’t apply?
Higher TDS for non-filers won’t apply on TDS deducted on salary income, PF, lottery, cash withdrawals, horse race, and trust income, among others. Non-resident Indians not having permanent establishment here are also exempted from a higher TDS rate.
CBDT’s tool to check compliance
CBDT has recently launched a utility tool named ‘Compliance Check for Section 206AB & 206CCA’ to ease the compliance burden on taxpayers. You can also check if you’re among the non-filers of Income Tax Returns.
CBDT said that the tool is already functioning through the income tax department’s portal, which is https://report.insight.gov.in.
Deadline extended for filing TDS
Recently, the CBDT had announced extensions in the last date of several tax compliances. For instance, the last date to file the TDS for Q4 FY21 has been extended to July 15. The decision was taken after taking COVID-19 rules into consideration.
Meanwhile, the income tax department has extended the deadline for paying the ITR for the financial year 2020-2021 to September 30, 2021, from July 31, 2021.
