Getty ImagesBudget 2022 has further tightened the rules for non income tax return filers. Currently, if an individual did not file income tax returns for previous two years and the TDS and TCS in each of these years exceeded Rs 50,000 then the person would be liable for TDS/TCS at higher rates in the ongoing financial year. Budget 2022 proposes to apply the above provision if income tax return has not been filed for the previous one year instead of two years.
The higher TDS/TCS law was announced in Budget 2021 and became effective from July 1, 2021. Higher TDS and/or TCS is applicable to those individuals having interest income, dividend income, annuity pensions or other incomes as specified. However, this law is not applicable for tax deducted on salaries, provident fund, winnings from lottery etc.
The higher TDS/TCS rate applied will be the higher of anyone of the following:
a) twice the rate specified in the relevant provision of the Act; or
b) twice the rate or rates in force; or
c) the rate of five per cent
Further, the government has launched the utility on the income tax portal to check who has not filed income tax returns for the past two years.
The Budget Memorandum states: In order to widen and deepen the tax-base and to nudge taxpayers to furnish their return of income, Finance Act, 2021 inserted sections 206AB and 206CCA in the Act. The said sections provide for special provision for deduction and collection of tax at source respectively, in case of specified persons at higher rates specified therein. 2. “Specified person” has been defined to mean a person who has not filed the returns of income for both the two assessment years relevant to the two previous years immediately preceding the financial year in which tax is required to be deducted or collected, for which the time limit for filing return of income under sub-section (1) of section 139 has expired; and the aggregate of tax deducted at source and tax collected at source in his case is rupees fifty thousand or more in each of these two previous years. Government has provided online utility to taxpayers to check whether the person is specified person or not.
The higher TDS/TCS law was announced in Budget 2021 and became effective from July 1, 2021. Higher TDS and/or TCS is applicable to those individuals having interest income, dividend income, annuity pensions or other incomes as specified. However, this law is not applicable for tax deducted on salaries, provident fund, winnings from lottery etc.
The higher TDS/TCS rate applied will be the higher of anyone of the following:
a) twice the rate specified in the relevant provision of the Act; or
b) twice the rate or rates in force; or
c) the rate of five per cent
Further, the government has launched the utility on the income tax portal to check who has not filed income tax returns for the past two years.
The Budget Memorandum states: In order to widen and deepen the tax-base and to nudge taxpayers to furnish their return of income, Finance Act, 2021 inserted sections 206AB and 206CCA in the Act. The said sections provide for special provision for deduction and collection of tax at source respectively, in case of specified persons at higher rates specified therein. 2. “Specified person” has been defined to mean a person who has not filed the returns of income for both the two assessment years relevant to the two previous years immediately preceding the financial year in which tax is required to be deducted or collected, for which the time limit for filing return of income under sub-section (1) of section 139 has expired; and the aggregate of tax deducted at source and tax collected at source in his case is rupees fifty thousand or more in each of these two previous years. Government has provided online utility to taxpayers to check whether the person is specified person or not.
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