Non-filers of income tax returns for the preceding two fiscal years would be subject to increased T D S and TCS rates under Budget 2021.

Income taxpayers who haven’t submitted their income tax returns for the last two fiscal years will have to pay a higher TDS and TCS starting Thursday (July 1). There are, however, certain restrictions on who will be affected by the new regulation.

According to the Central Board of Direct Taxes (CBDT), taxpayers who haven’t submitted their income tax returns for the previous two fiscal years, i.e. fiscal years 2018-2019 and 2019-2020, would have to charge higher TDS and TCS if their deductions were INR 50,000 or more in each of the two years.

The Central Board of Direct Taxes has provided a new functionality called “Compliance Check for Sections 206AB and 206CCA” to help with this compliance load.

The tax deductor or collector can enter the dedicatee’s or collector’s single PAN (PAN search) into the portal and receive a response from the functionality whether the deductee or collected is a ‘specified person.’ The result of a PAN search will be displayed on the screen and maybe downloaded in PDF format.

TDS deducted on salary income, PF, lottery, cash withdrawals, horse racing, and trust revenue, among other things, would not be subject to higher TDS for non-filers. Non-resident Indians who do not have a permanent presence in the country are likewise free from the higher T D S rate.

The CBDT has notified that certain tax compliance deadlines had been extended. The deadline for filing TDS for Q4 FY21, for instance, extended until July 15. COVID-19 regulations were considered while made the decision.