SECTION 206AB OF INCOME TAX

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Section 206AB of the Income Tax Act, which mandated higher TDS rates for non-filers, has been omitted effective from 1st April 2025. The Finance Bill 2025 proposed this removal due to excessive compliance burdens. Consequently, from the financial year 2025-26 onwards, deductors and collectors are no longer required to apply these higher rates or verify the IT return filing status of their vendors.

Mohanraj J

Mohanraj J (Querist)
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25 November 2025 Dear Experts
I'd like to know that still the Section 206AB is applicable or Omitted w.e.f. 01/04/2025?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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25 November 2025 - Finance Act, 2025 Amendment
- The Finance Bill, 2025 explicitly proposed the removal of Section 206AB and Section 206CCA (which dealt with higher TCS for non-filers).
- The government cited excessive compliance burden and capital blockage as reasons for omission. Deductors and collectors had to verify return-filing status of deductees/collectees, which created operational challenges.
- Effective Date
- The omission is effective from 01 April 2025.
- Up to 31 March 2025, Section 206AB remained applicable.
- From FY 2025–26 onwards, deductors/collectors no longer need to apply higher TDS/TCS rates for non-filers.

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Mohanraj J

Mohanraj J (Querist)
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25 November 2025 Dear Sir Ji, Thank you very much for your answer.
The final question is - We (Buyer) no need to get an ITR filed acknowledgement from the vendors?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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25 November 2025 Correct...
No need for any confirmation from suppliers.

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