Starting from July, some taxpayers could must pay Tax Deducted At Source (TDS) at larger charges. According to Finance Act 2021, if a taxpayer has not filed TDS within the final two years and TDS deducted annually exceeds of Rs 50,000, the Income Tax division will cost extra whereas submitting the earnings tax returns (ITR) from July 1. “In Budget 2021, a brand new part 206AB was launched to deduct TDS at a better charge on circumstances with sure nature of earnings. Where the return of earnings not filed for the earlier two years and TDS deducted in annually exceeds Rs 50,000,” mentioned Abhishek Soni, co-founder and chief government officer, Tax2win.
The charge of TDS will probably be larger of the beneath limits a) Twice the speed specified below the related part/provision or b) Twice the speed/charges in power or c) Rate of 5 per cent, Soni defined.
The Central Board of Direct Taxes (CBDT) has prolonged the deadlines to file earnings tax returns for the monetary yr 2021. The final date of submitting Tax Deducted at Source (TDS) for the fourth quarter of monetary yr 2020-21 has been prolonged to June 30, in accordance with the round. Earlier, the due of submitting the TDS was May 31.
“This is a serious reduction for the TDS deductors since these returns contain lot of data and knowledge to be reported accurately,” Sujit Bangar, founder, Taxbuddy.com talked about. Accordingly, the due date of issuance of Form 16 has additionally been prolonged to July 15 from June 15.
The Income Tax Department has lately unveiled a brand new ITR e-filing portal for taxpayers. There will probably be a bunch of options obtainable on the brand new web site. Vivek Jalan, accomplice, Tax Connect Advisory Services LLP mentioned that the brand new earnings tax return e-filing portal could have a brand new facility to examine whether or not the person has filed earlier returns or not.
“Under new part 206AB, for specified individuals who haven’t filed ITRs for final two years, a better TDS needs to be deducted by the payer. It is predicted that for for deductor to examine whether or not the deductee has filed its final two ITRs or not, the brand new tax portal goes to have a brand new facility,” Jalan mentioned.
“In absence of such a facility, it might not be doable to implement the brand new Section 206AB. It is necessary to notice that to examine GSTR compliance the GST Portal already has this type of characteristic. Now for ITR, the earnings tax portal can also be anticipated to have this characteristic,” he additional added.
“If an organization pays a contractor A and it’s liable to deduct 2% TDS on the fee to the contractor, it has to go and examine on the portal whether or not A has filed its final 2 ITRs or not. If A has not filed final 2 ITRs and the whole TDS deducted from A is greater than Rs 50,000 then the corporate has to deduct 5% TDS as an alternative,” he additional defined.
The New Rule Won’t Be Applicable in These Cases
However, the newly applied Section 206AB won’t be relevant for TDS deducted below Section 192 for wage or withdrawal from Provident Funds below Section 192A. TDS on profitable from the cardboard sport, crossword, lottery, puzzle or another video games and horse race below Section 194B or 194BB won’t come below the purview of latest part. It won’t be relevant for TDS on money withdrawal over Rs 1 crore below Section 194N and earnings in opposition to funding within the securitisation belief below Section 194LBC.
“It should be famous that this TDS is pay as you go tax. We mustn’t misunderstand it as penalty or curiosity. While submitting earnings tax return, credit score for this TDS completed will be claimed that particular person,” mentioned Sujit Bangar, founder, Taxbuddy.com.
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