The Income Tax Department has made a list of such people whose TDS or TCS will be deducted more. In the language of the tax department, it is called ‘Specified Person’. TDS or TCS of specified person will be deducted at higher rate.
In the list of income tax, there are names of some people whose TDS is going to be deducted more than normal. The new rule of TDS has come into effect from July 1. According to the new rule, people who have not filed Income Tax Return (ITR) for 2018-19 and 2019-20 and whose TDS and TCS combined together exceed Rs 50,000, more TDS will be deducted on income other than their salary.
The Income Tax Department has made a list of such people whose TDS or TCS will be deducted more. In the language of the tax department, it is called ‘Specified Person’. TDS or TCS of specified person will be deducted at higher rate. You can visit http://report.insight.gov.in to check deduction of excess TDS or TCS on interest. On this website, tax deducting entities like banks, mutual funds or companies can check the names. Here it will be known whose TDS or TCS is going to be deducted more.
Survival mode
However, taxpayers can also get their names removed from this list. Special measures have been taken to ensure that no more TDS is deducted on the remaining months of the financial year. For this, you will have to file income tax return for 2020-21. In this regard, the Income Tax Department has issued a circular on June 21, 2021. It has been said in the circular that if the taxpayer files ITR for Income Tax Return for 2020-21, then his name can be removed from the list of excess TDS / TCS deduction. The name of the taxpayer will not be included in the higher rate of TDS deduction on filing of ITR. He will have to pay only normal TDS.
TDS new rule
Sudhakar Sethuraman of Deloitte India tells Economic Times, the new law explains the importance of ITR filing for 2020-21. In this, electronic verification of ITR-V has been made mandatory. According to the new law, this income return will be considered valid if it is sent manually to the Centralized Processing Center, Bangalore. If ITR is filed but not verified, the name of the taxpayer will not be removed from the list of ‘Specified Person’. Therefore, if the name is to be removed from the list of deduction of more TDS or TCS, then these new rules will have to be followed.
Two sections in the Income Tax Act
Actually, the government has added two new sections in the Income Tax Act, namely 206AB and 206CCA. Both these sections have come into force from 1st July 2021. Both these sections talk about higher rate of TDS and TCS (Tax Collection at Source). 206AB talks about TDS while 206CCA talks about TCS. 206AA is already in force but 206AB and 206CCA have been implemented with effect from 1st July, 2021. Section 206AA says that if you have to deduct TDS, that is, you come under TDS deduction, but you do not have a PAN card, then your company will deduct TDS at the rate of 20%.
