The Government has been steadily increasing the scope of withholding taxes, albeit ensuring punitive rates of withholding taxes for non-filers. For starters, Finance Act, 2021 introduced a provision, namely, section 206AB in the Income-tax Act, 1961 (“the Act”) which requires a payor to deduct taxes at the higher of the following rates on any sum or income or the amount paid, payable or credited by the payor in the case of a “specified person”:
• At twice the rate specified in the relevant provision of the Act;
• At twice the rate or rate in force; or
• At the rate of 5 percent.
The objective for the introduction of the said provision has been stated in the Memorandum to the Finance Bill, 2021, which states as follows:
“Section 206AA of the Act provides for a higher rate of TDS for non-furnishing of PAN. Similarly, section 206CC of the Act provides for a higher rate of TCS for non-furnishing of PAN. It is seen that while these provisions have served their purpose in ensuring obtaining and furnishing of PAN by various person, there is a need to have similar provisions to ensure filing of return of income by those people who have suffered a reasonable amount of TDS/TCS.
Hence, it is proposed to insert a new section 206AB in the Act as a special provision providing for a higher rate for TDS for the non-filers of the income tax return. Similarly, it is proposed to insert a section 206CCA in the Act as a special provision for providing for a higher rate of TCS for non-filers of income-tax return.”
This story is from the July - August 2021 edition of UNIQUE TIMES.
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This story is from the July - August 2021 edition of UNIQUE TIMES.
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