*TDS U/S Sec 206AB for non filers of income tax*

*TDS U/S Sec 206AB for non filers of income tax:*

1. *Provision:*

Section 206AB mandates the person to deduct TDS in case of non-filing of an income tax return by the specified person.

2. *Meaning of specified person:*

A specified person means a person who satisfies all the below criteria:

👉The person has not filed his Income Tax Returns for the last 2 years. 

👉Due date for filing returns as per Sec 139(1) has passed. 

👉The TDS or TCS liability for each of the two years has been Rs 50,000 or more. 

3. *Tax liability:*

TDS under section 206AB will be deducted at higher of the following rates-

👉 Twice the rate as specified under the relevant provision of the Income Tax Act; or

At the rate of 5%.

4. *Effective date of applicability: 1st July, 2021*. 

5. *Exemption:*  TDS under Salary, withdrawal of PF, winnings under horse races, games, income against investment in securitisation trust, withdrawals of cash 

6. *Applicability of both Sec 206AA and 206AB:*

👉Section 206AA of the Income Tax Act mandates the person to deduct TDS at higher rates in case of non-availability of PAN.

👉If both Sec 206AA and 206AB are applicable, higher of the rates prescribed in both sections would be applicable.