The Indian Finance Act 2021 has introduced a new way to penalise non-filers of Income Tax Return (ITR) for the last two tax years by levying a higher rate of TDS/ TCS.
This requirement is effective from July 1, 2021, and would be applicable in those cases where the amount of TDS/ TCS in each of the previous two tax years is more than INR 50,000/-. The rate of TDS/TCS on such persons will be double the existing rate or 5%, whichever is higher.
In order to reduce the compliance burden, the Central Board of Direct Taxes (CBDT) of India would be issuing a new functionality “Compliance Check for Sections 206AB and 206CCA” on the Income Tax Portal to help TDS deductors and TCS collectors identify such persons on whom the higher rate of taxes will be levied.
Click on the below button for the detailed circular issued by the CBDT outlining the use of new functionality in order to comply with the new provision.