The new TDS rule will come into effect from July 1, 2021 Only those taxpayers who have no permanent residence in India have been kept under the ambit of the new rule.
The government has made it mandatory to file income tax returns from the current financial year. If your income falls under TDS, then filing returns is very important. Also, it has become necessary for all individual taxpayers to have PAN. How will the burden of TDS be increased on those who do not take care of it, Pramod Tiwari’s report gives complete information-
Returns have not been filed in the last two financial years
From FY 2021, who will not file income tax returns and income falls under the TDS deduction, then such taxpayers will have to pay TDS at a higher rate. Cleartax CEO Archit Gupta says that if such taxpayers do not have PAN, they will have to pay TDS at an even higher rate. The new TDS rule will come into effect from July 1, 2021. However, only those taxpayers who do not have permanent accommodation in India have been kept under the purview of the new rule.
Under the new provision, taxpayers who have not filled ITR and their income falls in the category of TDS deduction of more than Rs 50,000 for the last two years, then they will have to pay TDS at a higher rate. In addition, if the ITR is not filed exactly two years before the fiscal year in which tax deduction is required, for which the deadline for filing ITR has expired, double TDS will have to be paid.
The new rule will not apply here
The new provision will apply to payments such as interest, contracts, professional service, rent. However, where the entire amount of tax will need to be deducted, this rule will not apply. Such payments are excluded from the new rule.
- wages
- Premature withdrawal from EPF
- Amount won in lottery or crossword puzzles or cord games
- Horse race
- Income from investment in Securities Trust
- TDS on cash withdrawal of more than 1 crore
- TDS deducted more than Rs 50,000 will have to be paid more, then you will have to pay more than 20 percent TDS
- The rate of TDS can be more than 20 per cent if the concerned taxpayer has not informed his PAN card to the TDS payer. Under the new rule, the payer is required to certify three things before deducting TDS at the time of payment.
- Whether the tax deduction of the payer in the last two years was more than 50 thousand rupees.
- The person on whom TDS is made liable, has filed ITR in the last two years
The last date for the original returns in the last two years has passed. However, if the last date for filing ITR of any year is still left at the time of making a payment, there is no need to deduct TDS at higher rates at the time of payment.
This is how the mathematics of deduction can be understood
Suppose a company has been paying a contract of Rs 70 lakh to a customer for the last two years. On this, the company will deduct tax (70 thousand rupees annually) at the rate of 1 percent. If the customer has not filed ITR in both the years and the last date has also passed, then after confirming it in the third year, the company will deduct tax at the rate of 5 percent, which is more than double 2 percent of 1 percent. is. Now, if the customer has not given the information about the PAN, then TDS will have to be given at the rate of 20 percent, which is more than 5 percent and 2 percent.
Take steps to keep income in mind
All taxpayers have to be serious about filing their returns keeping in mind their income. If TDS has been deducted on your income, do not miss out on filing returns. If one year is not filled by mistake, then the other year file the return of both the years. If not done, the burden of TDS will increase more than double.
