Question: Consider the following statements:
i) Non-filer of income tax for past two financial years will be subjected to higher taxation. TDS or TCS will be charged at double rate specified in relevant provision of Income Tax Act or at 5 per cent.
ii) Tax deduction at source (TDS) in India is a means of collecting tax on income, dividends or asset sales, by requiring the payer (or legal intermediary) to deduct tax due before paying the balance to the payee (and the tax to the revenue authority).
iii) These new rules have come into effect from July 1.
Which of the following are correct?
a) i, ii
b) ii,iii
c) i, ii,iii
d) none of the above
Ans: c
Context
- Government has announced change in rules in collecting TDS.
Facts
- As per the changed rules Non-filer of income tax for past two financial years will be subjected to higher taxation.
- TDS or TCS will be charged at double rate specified in relevant provision of Income Tax Act or at 5 per cent.
- Higher taxes will be levied if such tax deduction was ₹50,000 or more in each of those two years.
About TDS
- Tax deduction at source (TDS) in India is a means of collecting tax on income, dividends or asset sales, by requiring the payer (or legal intermediary) to deduct tax due before paying the balance to the payee (and the tax to the revenue authority).
- About TCS (Tax collected at source)
- Tax collected at source (TCS) is the tax payable by a seller which he collects from the buyer at the time of sale. Section 206C of the Income-tax act governs the goods on which the seller has to collect tax from the purchasers.
- Who will enforce these new rules?
- Central Board of Direct Taxes (CBDT) has introduced a utility tool called Compliance Check for Section 206 AB & 206 CCA, to enforce these new rules.
- This tool will ease compliance burden of tax deductions who will use this functionality to identify non-filers. This functionality is already functioning on reporting portal of income tax department.
By kameshwar shukla