Circular No. 11/2021: Dated 21st June 2021

On 21st June 2021, the Central Board of Direct Taxes (CBDT) issued a circular regarding the use of functionality under sections 206AB and 206CCA of the Income Tax Act, 1961. The details of Circular No. 11/2021 are as under-

Circular No. 11/2021 Dated 21st June 2021- Summary

Finance Act, 2021 inserted two new sections 206AB and 206CCA in the Income-tax Act 1961 (hereinafter referred to as “the Act”) which takes effect from the 1st day of July 2021. These sections mandate tax deduction (section 206AB) or tax collection (section 206CCA) at a higher rate in the case of certain non-filers (specified persons) with respect to tax deductions (other than under sections 192, 192A, 194B, 194BB, 194LBC and 194N) and tax collections. The higher rate is twice the prescribed rate or 5%, whichever is higher.

Accordingly, the deductor has to verify if the vendor (deductee) has filed the return of Income for the previous two years and if not, a higher rate of TDS will be applicable for that particular deductee. Now the Income Tax and CBDT have enabled a new feature and clarified as follow-

  • A new feature called “Compliance Check for Section 206AB & 206CCA” will be enabled on the IT website.
  • The IT department has already compiled the list of persons who have complied with the provision, as before every compliance date (known as a specified person).
  • The deductor needs to check if the vendor has complied by feeding the PAN No.
  • If it is confirmed that the vendor has complied, it is enough if the deductor noted the compliance once for each financial year. It need not be checked before each transaction if he has complied.
  • Where the vendor has not complied, the deductor will check before each transaction as the vendor will move out of the specified person list only after compliance.
  • Belated returns will also be valid compliances to be removed from the specified persons if it si filed within the belated due date.

Full Read-

Other Circulars of 2021

Circular No.DateDetails
Circular No. 17/202109 September 2021Article
Circular No. 16/202129 August 2021Article
Circular No. 15/202103 August 2021Article
Circular No. 14/202102 July 2021Article
Circular No. 13/202130 June 2021Article
Circular No. 12/202125 June 2021Article
Circular No. 11/202121 June 2021Article
Circular No. 10/202125 May 2021Article
Circular No. 09/202120 May 2021Article
Circular No. 08/202130 April 2021Article
Circular No. 07/202126 March 2021Download Here
Circular No. 06/202126 March 2021Download Here
Circular No. 05/202125 March 2021Download Here
Circular No. 04/202123 March 2021Download Here
Circular No. 03/202104 March 2021Download Here
Circular No. 02/202103 March 2021Download Here
Circular No. 01/202115 January 2021Download Here

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Compiled by- CA Chirag Agarwal (Practicing Chartered Accountants)

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