SECTION 206AB OF INCOME TAX

Save Share

This query is : Resolved

Quick Summary

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)

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)

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.

Message likes : 1 times

Mohanraj J

Mohanraj J (Querist)

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)

25 November 2025 Correct...
No need for any confirmation from suppliers.

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now