Haven’t filed ITR? Get ready to face higher TDS, lower in-hand salary

New Delhi: Individuals who failed to pay their income tax return (ITR) for the financial year 2020-21 will now have to face a higher tax deduction at source (TDS) from the ongoing financial year, according to the latest notification by the Central Board of Direct Taxes (CBDT). Such taxpayers will also find themselves on the non-tax filers list. The circular pointed out that individuals will have to face a higher YDS if they didn’t file ITR for the fiscal years under review and the aggregate TDS and tax collected at the source exceeded Rs 50,000 in that financial years. 

CBDT said that the definition of a “specified person” has been amended in both section 206AB and section 206CCA. The department added that the "specified person" means a person who satisfies both the following conditions: 

1. The individual has not furnished the ITR for the assessment year relevant to the previous year immediately preceding the financial year in which tax is required to be deducted/collected. 

2. Aggregate TDS and tax collected at source are Rs 50,000 or more in that previous year.

“A list of specified persons is prepared as of the start of the financial year 2022-23, taking the previous year 2020-2 1 as the relevant previous year. List contains names of the taxpayers who did not file a return of income for the assessment year 202 1-22 and have an aggregate of TDS and TCS of fifty thousand rupees or more in the previous year 2020-21,” CBDT said in its circular. 

Further, banks are expected to find out whether the individuals have met both the conditions or not. If you meet both the conditions, then get ready to witness a higher TDS. Also Read: Pre-owned cars platform CARS24 lays off 600 employees in India

“The provision of higher TDS under section 206AB is not applicable to tax to be deducted under sections 194-IA, 194-18 and 194M. This is in addition to already existing provision of its non-applicability on tax to be deducted under sections 192, 192A, 194B, 194BB, 194LB and 194N,” CBDT said in its statement. Also Read: Plastic Straw Ban: Frooti, Appy Fizz maker Parle Agro wants govt to postpone decision, here’s why