Some taxpayers may have to pay TDS deducted at source at higher rates starting from July, if a taxpayer has not filed TDS in the last two years and the TDS deducted in each year exceeds Rs 50,000.

So Income Tax Department will charge more while filing Income Tax Return ITR from July 1, In Budget 2021, a new section 206AB was introduced to deduct TDS at higher rate on cases having fixed nature of income.

Abhishek Soni, Co-Founder and CEO, Tax2Win said, where the return of income has not been filed in the last two years and the TDS deducted in each year is more than Rs 50,000. twice the rate specified under the relevant section/provision or b) twice the applicable rate/rates or c) the rate of five per cent, Soni explained.

The Central Board of Direct Taxes (CBDT) has extended the deadline for filing income tax returns for the financial year 2021. The last date for filing Tax Deduction at Source (TDS) for the fourth quarter of the financial year 2020-21 has been extended. June 30, as per the circular. Earlier the due date for filing TDS was 31st May.

Sujit Bangar, Founder,, said, “This is a big relief for those deducting TDS as these returns involve a lot of records and data to be reported correctly. Accordingly, the due date for issue of Form 16 has also been extended from June 15 to July 15.

Vivek Jalan, Partner, Tax Connect Advisory Services LLP said that the new income tax return e-filing portal may have a new facility to check whether the individual has filed the return earlier.

Under the new section 206AB, for specified persons who have not filed ITR for the last two years, a higher TDS is to be deducted by the payer. It is expected that there is going to be a new facility in the new tax portal for the deductor to check whether the deductor has filed his last two ITRs or not,

Jalan said – In the absence of such facility, it may not be possible to implement the new section 206AB, it is important to note that such facility is already there in the GST portal to check GSTR compliance, now in the form of ITR. For this, the income tax portal is also expected to have this facility, he added.

The new rule will not apply in these cases
However, the newly applicable section 206AB will not be applicable for TDS deducted under section 192 for withdrawal from salary or provident fund under section 192A. TDS on winnings under section 194B or 194BB by way of card game, crossword, lottery, puzzle or any other game and horse race will not come under the purview of the new section. It will not be applicable for TDS on income against investment in Securitization Trust u/s 194N and cash withdrawal exceeding Rs.1 crore under section 194N.

If you are deducting TDS on Salary Income (192), Lottery (194B), Horse Racing (194BB), PF (192A), Trust Income (194LBC), and Cash Withdrawal (194N), the provisions of this section will not apply. Also, it is not applicable for NRIs who do not have any permanent establishment in India, said Abhishek Soni.