05 Jun, 2021 1p.m.

Higher TDS from July 1, 2021 for non filing IT returns


A higher TDS/TCS rate would be applicable for Income Tax Return (ITR) non-filers from July 1, according to the Finance Act, 2021. The Finance Act has broadened the scope for collection of tax from the very source to ensure proper income reporting by every assessee.

With effect from July 1, 2021, a person will have to pay TDS at a higher TDS rate if he/she has not filed Income Tax Returns for the last two years and has aggregate TDS/TCS credit of Rs. 50,000 or more in each of the two years.

Under Section 206AB of the Income Tax Act 1961, the new TDS rate levied would be the highest of:

  • Double the rate specified in the relevant provision of the Income Tax Act; or
  • Double the rate or rates in force; or
  • At the rate of five per cent.

For TCS collection, the rate under section 206CCA of the Act will be higher of Double the rate specified in the relevant section; or 5 per cent.

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