The Finance bill 2021, proposed to insert a new section 206CCA for deduction of TCS at higher rates for those who have not filed their Income Tax Return. Here are the details of the new section 206CCA of the Income Tax Act, 1961.
Proposed section 206CCA of the Act would apply on any sum or income or the amount paid, or payable or credited, by a person (herein referred to as deductee) to a “specified person”.
Here “specified person”, has been defined under subsection (3) as a person, who has not filed the returns of income for both of the 2 assessment years relevant to the 2 previous years which are immediately before the previous year in which tax is required to be deducted or collected, as the case may be“.
Applicability of section 206CCA
Budget 2021, provide for the applicability of section 206CCA w.e.f. 1st July 2021.
Condition for deduction of TCS u/s 206CCA
Here are 3 important conditions, which needs to be satisfied before deduction of TCS at higher rates u/s 206CCA
1) Time limit for filing tax returns under sub-section (1) of section 139 of the Act has expired for both these assessment years.
2) Aggregate of tax collected at source in his case is Rs. 50,000 or more in each of these two previous years.
3) Specified person shall not include a non-resident who does not have a permanent establishment in India.
🎯 If the specified person does not submit the PAN (section 206CC) as well as not filed the return (section 206CCA), the TCS shall be collected at the higher rates amongst both the sections.
🎯 The non-resident person who does not have any permanent establishment is excluded from the scope of the specified person.
Disclaimer: The information contained in the above article are solely for informational purpose after exercising due care. However, it does not constitute professional advice or a formal recommendation. The author does not own any responsibility for any loss or damage caused to any person, directly or indirectly, for any action taken on the basis of the above article.
Feedback/Suggestion- Hope you all find it useful, please give your valuable feedback & let us know if there is an error. Thanks in Advance
I am a full-time professional Blogger & Entrepreneur. I already have many blogs on diversified topics and also manages more than 10 pages on assorted subject matters.
I have more than 5+ years of acetic and delightful experience in Blogging and writing on more than 100+ topics in English and Hindi both.
I started my blog as my dream project to help others to get knowledge with my content. I was not pro or perfect however I started imperfectly and achieved my end goals. Always remember the caption “You never lose, either you win it or learn it “
Contact us- [email protected]