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CBDT Exempts RBI from Higher TDS/TCS Rates for Non-Filing of Income Tax Returns

Last updated: 29 May 2024


CBDT has released two significant notifications on May 27, 2024, introducing higher rates of Tax Deducted at Source (TDS) and Tax Collected at Source (TCS) for individuals and entities failing to furnish their Income Tax Returns (ITR). These directives, detailed in Notifications No. 45 and 46/2024, mark a crucial development in the enforcement of tax compliance.

CBDT Exempts RBI from Higher TDS/TCS Rates for Non-Filing of Income Tax Returns

Key Highlights of the Notifications

1. Exclusion of RBI from "Specified Person" Status

  • Notification No. 45/2024 (S.O. 2107(E)): Under the authority granted by clause (ii) of the proviso to sub-section (3) of section 206AB of the Income-tax Act, 1961, the Central Government has formally excluded the Reserve Bank of India (RBI) from being classified as a "specified person" for the purposes of higher TDS rates.
  • Notification No. 46/2024 (S.O. 2106(E)): Similarly, leveraging clause (ii) of the proviso to sub-section (3) of section 206CCA of the Income-tax Act, 1961, the RBI is exempted from being identified as a "specified person" for higher TCS rates.

2. Implementation Date

  • Both notifications are effective immediately from the date of their publication in the Official Gazette.

These exemptions for the RBI ensure that the central banking institution is not subjected to the increased compliance burden of higher TDS and TCS rates applicable to non-filers of ITR.

Implications for Taxpayers

The notifications underline the government's intent to tighten compliance measures and incentivize timely filing of tax returns. Taxpayers who fail to furnish their ITR will face higher rates of TDS and TCS, thereby reinforcing the importance of adherence to tax filing deadlines.

Official copy of the notifications have been attached below

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Category Income Tax   Report

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