TCS

New functionality under Section 206AB and 206CCA of the Income-tax Act, 1961

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Finance Act, 2021 inserted two new sections 206AB and 206CCA in the Income-tax Act 1961 (which takes effect from 1st day of July, 2021. These sections mandate tax deduction (section 206AB) or tax collection (section 206CCA) at higher rate in case of certain non-filers (specified persons) with respect to tax deductions (other than under sections 192, 192A, 194B, 194BB, I 94LBC and I 94N) and tax collections. Higher rate is twice the prescribed rate or 5%, whichever is higher. The specified persons means:

  • He has not filed the returns of income for both of the two assessment years relevant to the two previous years immediately before the previous year in which tax is required to be deducted collected. Two previous years to be counted are required to be those whose return filing date under sub-section (1) of section 139 has expired.
  •  Aggregate of tax deducted at source and tax collected at source is rupees fifty thousand or more in each of these two previous years.

CBDT had come up with a facility to check the return filing details of specified persons, had come up with a new functionality “Compliance Check for Sections 206AB & 206CCA”. CBDT had issued Circular no.11/2021 dated 22.06.2021 in this regard.

The detailed steps about how to use this functionality is given below:

Step: 1            Go to Reporting Portal at URL https://report.insight.gov.in.

Step: 2            On the left sidebar of the Reporting Portal homepage, click on Register button.

Step: 3            User is redirected to the e-filing login page. Or

Step: 4            Directly navigated to e-filing portal through http://www.incometax.gov.in/

Step: 5            Log in to e-filing using e-filing login credential of TAN.

Step: 6            Under “Pending Actions”, select “Reporting Portal”.

Step: 7            After being redirected to the Reporting portal, select New Registration option and click Continue.

Step: 8            On the next screen, select the Form type as Compliance Check (Tax Deductor & Collector). The Entity Category will be displayed based on the category in which TAN is registered at e-filing. Click Continue to navigate to entity details page.

Step: 9            Enter relevant entity details on entity details page and click on “Add Principal Officer” button to add Principal Officer.

Step: 10       Enter Principal Officer details on the Principal Officer Details page.

Step: 11        If more users such as Nodal Officer, Alternate Nodal Officer and other users are to be registered at this instance, adding the details of such users can be continued, otherwise the same can be done after registration also.

Step: 12       Click on Preview button to view the entered entity and principal officer details.

Step: 13       Click on Submit button to submit the registration request.

Step: 14 Acknowledgement receipt of registration request is provided through portal and the same will also be shared through an email notification to the Principal Officer.

Step: 15 Once the registration request is approved by Income tax Department, email notification will be shared with the Principal Officer along with ITDREIN details and login credentials.

Accessing the functionality on Reporting Portal – by Principal Officer

Step: 1      Go to Reporting Portal at URL https://report.insight.gov.in.

Step: 2      On the left sidebar of the Reporting Portal homepage, click the Login button.

Step: 3    Enter the required details (of Principal Officer) in the respective fields (PAN and Password as received in the email or updated password) and click Login to continue.

Step: 4    If Principal Officer’s PAN is registered for multiple Forms & ITDREIN, he/she needs to select Form type as Compliance Check (Tax Deductor & Collector) and associated ITDREINs from the drop-down.

Step: 5      After successfully logging in, the home page of Reporting Portal appears.

Step: 6 Click on Compliance Check for Section 206AB & 206CCA link provided as shortcut on left panel.

Compliance Check for Section 206AB & 206CCA

Upon clicking Compliance Check for Section 206AB & 206CCA at home page, the compliance check functionality page appears. Through the functionality, tax deductors or collectors can verify if any person (PAN) is a “Specified Person” as defined in Section 206AB & 206CCA.

The same can be done in two modes:

  • PAN Search: To verify for single PAN
  • Bulk Search: To verify for PANs in bulk

PAN Search (Single PAN Search)

Step 1: Select PAN Search tab under Compliance Check for Section 206AB & 206CCA

functionality.

Step 2: Enter valid PAN & captcha code and click Search.

Following Output result will be displayed upon entering a valid PAN & captcha code. Output result will not be shown if Invalid PAN is entered.

Output Result-

  • Financial Year: Current Financial Year
    • PAN: As provided in the input.
    • Name: Masked name of the Person (as per PAN).
    • PAN Allotment date: Date of allotment of PAN.
    • PAN-Aadhaar Link Status: Status of PAN-Aadhaar linking for individual PAN holders as on date. The response options are Linked (PAN and Aadhaar are linked), Not Linked (PAN & Aadhaar are not linked), Exempt (PAN is exempted from PAN-Aadhaar linking requirements as per Department of Revenue Notification No. 37/2017 dated 11th May 2017) or Not-Applicable (PAN belongs to non-individual person).
    • Specified Person u/s 206AB & 206CCA: The response options are Yes (PAN is a specified person as per section 206AB/206CCA as on date) or No (PAN is not a specified person as per section 206AB/206CCA as on date).

Output will also provide the date on which the “Specified Person” status as per section 206AB and 206CCA is determined.

Step 3: Click PDF icon to download the details in PDF format.

Bulk Search

Step 1: Select “Bulk Search” tab.

Step 2: Download the CSV Template by clicking on “Download CSV template” button.

Step 3: Fill the CSV with PANs for which “Specified Person” status is required. (Provided PANs should be valid PANs and count of PANs should not be more than 10,000).

Step 4: Upload the CSV by clicking on “Upload CSV” button.

Step 5: Uploaded file will start reflecting with Uploaded status. The status will be as follows:

  • Uploaded – The CSV has been uploaded and pending for processing.
    • Available – Uploaded CSV has been processed and results are ready for download.
    • Downloaded – The user has downloaded the output results CSV.
    • Link Expired – Download link has been expired.

Step 6: Download the output result CSV once status is available by clicking on Available link.

Step 7: After downloading the file, the status will change to Downloaded and after 24 hours of availability of the file, download link will expire and status will change to Link Expired.

Output Result (CSV):

Output result CSV file will have following details:

  • Financial Year: Current Financial Year
    • PAN: As provided in the input. Status shall be “Invalid PAN” if provided PAN does not exist.
    • Name: Masked name of the Person (as per PAN).
    • PAN Allotment date: Date of allotment of PAN.
    • PAN-Aadhaar Link Status: Status of PAN-Aadhaar linking for individual PAN holders as on date. The response options are Linked (PAN and Aadhaar are linked), Not Linked (PAN & Aadhaar are not linked), Exempt (PAN is exempted from PAN-Aadhaar linking requirements as per Department of Revenue Notification No. 37/2017 dated 11th May 2017) or Not-Applicable (PAN belongs to non-individual person).
    • Specified Person u/s 206AB & 206CCA: The response options are Yes (PAN is a specified person as per section 206AB/206CCA as on date) or No (PAN is not a specified person as per section 206AB/206CCA as on date).

Output will also provide the date on which the “Specified Person” status as per section 206AB and 206CCA is determined.

To view the screen shot please click on the link below:

https://drive.google.com/file/d/1FPuByX4MkXFe3zRbSpDxGEZT6fFmfPnm/view?usp=sharing

    Source: https://report.insight.gov.in.

    New functionality under Section 206AB and 206CCA of the Income-tax Act, 1961

    New Changes in Income Tax w.e.f. 01st October, 2020

    karthikandsunil, , , Leave a comment

    The Changes that will take effect in the Tax Collected at Source provisions is discussed below:

    Sl No.ParticularsAuthorised DealerOverseas Tour ProgramSeller of Goods
    1Who has to deduct?An authorised dealer, who receives an amount, for remittance out of India from a buyer,A seller of an overseas tour program packageA seller whose turonver during the financial year immediately preceding the financial year is more than ten crore Rupees, who receives any amount as consideration for sale of any goods of the value or aggregate of such value exceeding fifty lakh rupees in any previous year from a buyer.
    2From Whom to deduct?A person remitting such amount out of India under the Liberalised Remittance Scheme of the Reserve Bank of IndiaA buyer, being the person who purchases such packageA buyer who purchase goods and pays  consideration for sale of any goods of the value or aggregate of such value exceeding fifty lakh rupees in any previous year.
    3Any Exemption / Limit?The amount or aggregate of the amounts being remitted by a buyer is less than seven lakh rupees in a financial year and is for a purpose other than purchase of overseas tour program packageNilGoods of the value or aggregate of such value exceeding fifty lakh rupees in any previous year.
    4When to Deduct?At the time of debiting the amount payable by the buyer; or At the time of receipt of such amount from the said buyer, by any mode, whichever is earlier,At the time of debiting the amount payable by the buyer; or At the time of receipt of such amount from the said buyer, by any mode, whichever is earlier,At the time of receipt of such amount
    5Rate of TCS?A sum equal to 5% on amount above seven lakh rupees in normal cases
    A sum equal to one half per cent of the amount or aggregate of the amounts in excess of seven lakh rupees remitted by the buyer in a financial year, if the amount being remitted out is a loan obtained from any financial institution as defined in section 80E, for the purpose of pursuing any education    		A sum equal to five per cent of such amount as income-taxA sum equal to 0.1 per cent of the sale consideration exceeding fifty lakh rupees as income-tax:
    6Instances where TCS not applicable?(i)  liable to deduct tax at source under any other provision of this Act and has deducted such amount;
    (ii)  the Central Government, a State Government, an embassy, a High Commission, a legation, a commission, a consulate, the trade representation of a foreign State, a local authority as defined in the Explanation to clause (20) of section 10 or any other person as the Central Government may, by notification in the Official Gazette, specify for this purpose, subject to such conditions as may be specified therein.    		(i)  liable to deduct tax at source under any other provision of this Act and has deducted such amount;
    (ii)  the Central Government, a State Government, an embassy, a High Commission, a legation, a commission, a consulate, the trade representation of a foreign State, a local authority as defined in the Explanation to clause (20) of section 10 or any other person as the Central Government may, by notification in the Official Gazette, specify for this purpose, subject to such conditions as may be specified therein.    		(i) if the buyer is liable to deduct tax at source under any other provision of this Act on the goods purchased by him from the seller and has deducted such amount.
    (ii) (A) the Central Government, a State Government, an embassy, a High Commission, legation, commission, consulate and the trade representation of a foreign State; or

    (B) a local authority as defined in the Explanation to clause (20) of section 10; or

    (C) a person importing goods into India or any other person as the Central Government may, by notification in the Official Gazette, specify for this purpose, subject to such conditions as may be specified therein;

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    New Changes in Income Tax w.e.f. 01st October, 2020