Higher TDS for Non-ITR Filers?

The Central Board of Direct Taxes (CBDT) issues a circular for determining the non-filers or ‘specified person’ who will be subjected to higher TDS for FY 2022-23. As per the circular, if you have not filed ITR for the concerned previous fiscal year and the aggregate TDS and tax collected at source is more than Rs 50,000 that particular year, a high TDS will be levied. Banks will need to check if an individual has met both the conditions to impose a higher TDS. 

The circular also mentioned that according to Section 206AB and 206CCA, a specified individual would not include a non-resident who has no permanent establishment in India. During FY 23, new names were not added to the list of specified persons to reduce the burden on tax collectors and deductors. 

If any specified person files a valid return of income (filed and verified) for the AY 2021-22 during FY 23, their name shall be omitted from the specified persons’ list. The name will be removed on the date on which a valid return of income is filed.

Section 206AB provisions will not apply to a tax deduction on Virtual Digital Assets (VDA) transfer under Section 1948 to a taxpayer being an individual or Hindu Undivided Family (HUF). The provision applies when the sales, turnover, or gross receipts are not more than Rs 50 lakh in case of a profession or Rs 1 crore in case of a business. And, the period should fall during the financial year immediately preceding the year when such VDA was transferred or when such a person has no income under the head ‘profit and gains’ of business or profession.

For any clarifications/feedback on the topic, please contact the writer at bhavana.pn@cleartax.in

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