TDS rules change from this month. Check details here
In the Union Budget 2021, the Finance Ministry has introduced a fresh rule to deduct Tax Deducted at Source (TDS) at a higher rate for those who failed to file their income tax returns for the past couple of years. The rule kicked in from July 1, however, there are some exemptions. Here's all you need to know about it.
What is TDS?
According to the Income Tax Act, any company or individual making a payment needs to deduct tax at the source if that transaction crosses a certain limit. The rates for deduction are prescribed by the Income Tax Department.
Who will have to pay TDS at a higher rate?
Such taxpayers who have not filed their income tax returns (ITRs) in the past two years and their total amount of TDS exceeds Rs. 50,000 in each year, will have to pay the tax at a higher rate starting this month. A new Section - 206AB - has been introduced to deduct TDS at a higher rate in certain cases.
What will be the TDS rate for such taxpayers?
The rate of TDS will either be double the rate specified under the relevant provision of the Income Tax Act (or double the rate in force) or five percent, whichever of these is higher.
How can you check your TDS status?
The Central Board of Direct Taxes (CBDT) has launched a new tool called "Compliance Check for Section 206AB & 206CCA." You can check the TDS status by entering the PAN of the deductee or collectee on the reporting portal of the Income Tax Department. You can make a single search as well as a bulk search. The result can be downloaded in PDF format.
Who all are exempted from the rule?
The new rule will not be applicable on TDS deducted under Section 192 for salary or withdrawal from Provident Fund under Section 192A. Further, TDS on winning card games, lottery, and other games will not come under the ambit of the new rule. Non Resident Indians (NRIs), who do not have any permanent establishment in India, will also be exempted from them.
