Applicability : 1st July 2021
Section 206AB(1)
Not withstanding anything contained in any other provisions of the Act, where tax is required to be deducted at source under the provisions of Chapter XVIIB, other than section 192, 192A, 194B, 194BB, 194LBC OR 194N or any Sum or Income or amount paid, or payable or credited, by a person (hereafter referred to as deductee) to a specified person , the tax shall be deducted at the higher of the following rates, namely :-
i) at the rate specified in the relevant provision of the Act
ii) at Twice the rate or rates in force; or
iii) at the rate of five per cent
2) If the provisions of Section 206AA is applicable to a specified person, in addition to the provision of this section , the tax shall be deducted at higher of the two rates provided in this section and in section 206AA.
3) For the purpose of this section "specified person" means a person who has not filed the returns of income for both of the two assessment year relevant to the two previous years immediately prior to the previous year in which tax is required to be deducted, for which the time limit of 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:
Now we discuss applicability of this Section 206AB in our Tax Soul Term:
• Applicability on all person except HUF and Individuals (who are not Audited under this Act)
• Specified person means a person who has not filed Income Tax Return of two previous year's immediately before the previous year in which TDS is required to be deducted and TDS and TCS is more in each of two previous years
• In case assessee not comply this section, disallowance of an expenses up to 30%
Further this section is to check, if TDS is applicable, It means if TDS is not required to deduct then this Section is nothing to do.
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Author
Gautam Sanghai
Qualification: B.Com (H)
Location: Kolkata