50 Lacs in any previous year, shall at the time of credit of such sum to the account of the seller or at the time of payment thereof by any mode, whichever is earlier, deduct an amount equal to 0.1 per cent of such sum exceeding Rs. TDS on purchase of goods under Section 194Q ()Īs per Section 194Q of the Income Tax Act, 1961, any person, being a buyer who is responsible for paying any sum to any resident for purchase of any goods of the value where aggregate of such value exceeds Rs.
Declaration Format in respect of Section 206AB for deducting TDS u/s 194Qġ. Points to Ponder & Compliance in Section 194Q / 206C(1H) Interplay between Section 194Q and 206C(1H) Comparison between Section 194Q and 206C(1H) TCS on Sale of Goods under Section 206C(1H) () TDS on purchase of goods under Section 194Q () Just log in to the Reporting portal of the income tax department to check if you are a specified person under the relevant Sections. How to verify if you are a specified person as per Section 206AB and 206CCA?Īs mentioned above the CBDT has released a new tool known as ‘Compliance Check for Section 206AB and 206CCA’. *Permanent Establishment: A fixed place of business from where the business of the enterprise is wholly or partly run.Īlso Read: Tax for NRI on Indian Income and Investments in 2020-21 Non-Resident Indians (NRIs) who don’t have any *Permanent Establishment in India.Winning from lottery or crossword, horse race, or other games under Section 194B or 194BB.Section of 206AB will not be applicable in the cases mentioned below: The provisions of the section will also be applicable to TDS deductions on resident payments like service payment to vendors, shareholder dividends, rent, etc. OrĪlso Read: 5 Ways to save on the tax NRIs have to pay Who is covered in this Section?Ī higher rate of TDS will be applicable in the case of NRIs who have any permanent establishment in India. As per the new rules, TDS or TCS will be twice the tax rate specified in the relevant provision of the Income Tax Act. The Central Board of Direct Taxes (CBDT) stated that people who have not filed income tax returns for two years will be liable for a higher rate of TDS or TCS. What are the new TDS/ TCS rules for NRIs and resident taxpayers? As the due date for filing the income tax return for FY 2020-21 has not expired yet, the new rules won’t be applicable to the FY 2020-21. Since the provisions are effective from 1 July 2020, the returns of previous Financial Years 2018-20 will be considered. Note: Previous year is the Financial Year as per the Income Tax Act. To enforce new rules, the Central Board of Direct Taxes has introduced a utility tool, known as the Compliance Check for Section 206AB (for TDS) and 206CCA (for TCS) in the Income Tax Act, 1961. From the 1st July 2021, a higher tax would be deducted if an individual has not filed Income Tax Returns (ITR) in the last two previous years. These rules will be applicable to residents as well as NRIs (Non-Resident Indians). 2021 has brought in two new changes in rules related to TDS and TCS. So far only individuals who didn’t have a PAN card were liable for a higher TDS rate. New TDS/ TCS rules for NRIs: Effective from 01 July 2021Īlso Read: Income Tax for NRIs: All you need to know about NRI income tax
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