TDS to be charged at higher rate for non-filers of ITRs From July 1, 2021
TDS to be charged at higher rate for non-filers of ITRs From July 1, 2021
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For those who have not filed their income tax return (ITR), but their income is liable for TDS deduction, there will be a levy of Tax deducted at source, at a higher rate. And, in case one does not have the PAN, the rate of tax deduction will even be higher.

This new TDS rule will be effective from July 2021 as per the Budget announced by the Finance Minister. Archit Gupta, Founder and CEO, ClearTax explains the new TDS rule, whom it will impact and who all are excluded from it.

The Finance Minister in Budget 2021 has introduced a special provision of TDS in the income tax act. This section imposed a higher TDS rate on the individuals who have not filed income tax returns, but their income is liable for TDS deduction of more than Rs. 50,000 in the last two preceding previous years. The rate of TDS shall be higher of the following:

The new rule applies to a range of payments, including interest, contracts, professional services, rent, etc. This rule, however, will not apply to transactions in which the maximum amount of tax is required to be deducted. As a result, these transactions are not included:- Salary payments, Premature withdrawal of EPF, Winnings from any lottery or crossword puzzles or card games, Winnings from any horse races, Investment income from a securitization trust, TDS is levied on cash withdrawals exceeding Rs. 1 crore.

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