There are certain rules about to change from July 1, 2021 in accordance with the announcements made in the Union Budget and as per Finance Act 2021. One of the important changes that will come into effect from next month is related to your income tax returns filing.
Come July 1 and you may have to pay double Tax Deducted At Source (TDS) in case you have failed to file your TDS for the last two years. According to Finance Act 2021, if a taxpayer has not filed TDS in the last two years and TDS deducted each year exceeds of Rs 50,000, the Income Tax department will charge more while filing the income tax returns (ITR) from July 1.
“In Budget 2021, a new section 206AB was introduced to deduct TDS at a higher rate on cases with certain nature of income. Where the return of income not filed for the previous two years and TDS deducted in each year exceeds Rs 50,000,” said Abhishek Soni, co-founder and chief executive officer, Tax2win.
The rate of TDS will be higher of the below limits a) Twice the rate specified under the relevant section/provision or b) Twice the rate/rates in force or c) Rate of five per cent, Soni explained. The Central Board of Direct Taxes (CBDT) has extended the deadlines to file income tax returns for the financial year 2021. The last date of filing Tax Deducted at Source (TDS) for the fourth quarter of financial year 2020-21 has been extended to June 30, according to the circular.
Earlier, the due of filing the TDS was May 31. The Income Tax Department has recently unveiled a new ITR e-filing portal for taxpayers. There will be a host of features available on the new website. Vivek Jalan, partner, Tax Connect Advisory Services LLP said that the new income tax return e-filing portal may have a new facility to check whether the individual has filed earlier returns or not.
However, the newly implemented Section 206AB will not be applicable for TDS deducted under Section 192 for salary or withdrawal from Provident Funds under Section 192A. TDS on winning from the card game, crossword, lottery, puzzle or any other games and horse race under Section 194B or 194BB will not come under the purview of new section. It will not be applicable for TDS on cash withdrawal over Rs 1 crore under Section 194N and income against investment in the securitisation trust under Section 194LBC.