Circular regarding use of functionality under Section 206AB and 206CCA of the Income-tax Act, 1961

Last updated: 22 June 2021

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The Finance Act 2021 introduced Sections 206AB and 206CCA to the Income-tax Act, effective from 1st July. These sections require higher tax deduction or collection rates for specific non-filers, known as 'specified persons'. A 'specified person' is someone who hasn't filed income tax returns for the two preceding years and has had an aggregate TDS/TCS of ₹50,000 or more in each of those years. To help tax deductors and collectors comply, the CBDT has launched a new online 'Compliance Check for Sections 206AB & 206CCA' functionality.

F. No. 370133/7/2021-TPL Government of India Ministry of Finance Department of Revenue (Central Board of Direct Taxes) Dated: 21st June, 2021 Sub.: Circular regarding use of functionality under Section 206AB and 206CCA of the Income-tax Act, 1961- reg. Finance Act, 2021 inserted two new sections 206AB and 206CCA in the Income-tax Act 1961 (hereinafter referred to as the Act) which takes effect from I Sl day of July, These sections mandate tax deduction (section 206AB) or tax collect

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FAQ :

These sections, introduced by the Finance Act 2021, mandate higher tax deduction (Section 206AB) or tax collection (Section 206CCA) rates for certain non-filers, referred to as 'specified persons'.

Sections 206AB and 206CCA took effect from 1st July 2021.

The higher rate is twice the prescribed rate or 5%, whichever is greater.

A 'specified person' is someone who has not filed income tax returns for the two previous years (where the filing deadline has passed) and whose aggregate tax deducted or collected at source was ₹50,000 or more in each of those two years.

The Central Board of Direct Taxes (CBDT) has introduced a new online functionality called 'Compliance Check for Sections 206AB & 206CCA' on the Income-tax Department's reporting portal. This allows them to search single or multiple PANs.

The functionality provides a response indicating whether the searched PAN belongs to a 'specified person'. For single PAN searches, the response can be downloaded as a PDF. For bulk searches, a downloadable file is provided.