Tax Deduction at Source (TDS) is a very common topic in the finance industry. So how many sections are there under which TDS is deducted the answer is 28 and Counting. The word counting means, in every finance act introduced by Indian finance minister there is some change or most of the time a new section for tax deduction is inserted.
Why Government keep so much focus on improving the TDS regime under income tax?
Around 50 percent of the tax collection by government is by way of TDS. So it can be said that it is the main and major source of revenue collection for the government, that’s why they keep so much pressure on improving TDS regime. Every finance Act has something about the TDS. Government is trying to bring in the tax net each and every Individual who is liable to pay tax or even liable to file tax return by way of deducting TDS so to get the refund that individual has to file the tax return.
So what are the Latest and Significant Changes and Some New Sections in TDS Regime that will affect Individuals?
Here are few Amendments:
Amendment brought in this section is that, tax under this section will be deducted as per section 206AA (Talks about non furnishing of PAN) or Section 206AB (Talks higher rate of TDS for non-filers).It means that, Section 206AA will be applicable if Payee (Amount Receiver) is a non-Income tax return filer. 206AA states that the Tax will be deducted maximum 20 percent. This amendment will be effective from 01 July, 2021.
Here are some New Inserted Sections:
Provided, the TDS under this section will not be deducted if TDS under any other section under this Income tax Act is deductible.
Provided Further, If section 206(1H) is applicable which talks about Collecting TCS i.e. Section 194 Q and Section 206(1H) are applicable at the same time, then section 194Q will override and be applied i.e. in that case buyer have to deduct TDS and TCS will not be collected by the seller.
Provided, Income should only be by way of pension and no other income should be credited in the account.
Provided, That Senior Citizen shall furnish a declaration in the prescribed format to the designated bank for providing the deduction details (VI-A Deductions) and Rebate under section 87A.
This amendment will be effective from 01, April, 2021.
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