This section will not apply where tax is required to be deducted under sections 192 (salary), 192A (PF), 194B (amount won in lottery etc.), 194BB (amount won in horse racing), 194 LBC, or 194N.
In Budget 2021, it is proposed to collect TDS (tax deduction at source) and TCS (collection of tax at source) in excess of those who do not file Income Tax Return (ITR). According to the proposals, more TDS will be applicable to those who have income from interest, dividend, pension plan and capital gains. However, more such TDS will be applicable only to those who do not file ITRs of certain categories.
A new section has been proposed for this. This section will not apply where the tax needs to be deducted under sections 192 (salary), 192A (PF), 194B (amount won in lottery etc.), 194BB (amount won in horse racing), 194 LBC, or 194N.
As per the proposals, the applicable higher TDS rate will be higher than any of the following:
twice the rate prescribed in the relevant provision of the Act; or
2. double the applicable rate or rates; Or
3.What rates will apply to those who do not file the ITR of five per cent , can be understood by this example. Let’s assume that a person does not file ITR but he has interest income from bank FD. Banks are usually required to deduct tax on interest income from FDs. This has to be done when Form 15G or Form 15H is not submitted. In these forms, exemption from TDC is demanded. In this case, the bank will have to deduct tax at a higher rate.
It will be deducted as indicated below:
1. Double the rate prescribed in the relevant provisions of the Act i.e. 20%; Or
2. double the applicable rate or rates ie 15%; Or
3. Five percent rate