If you have not filed the income tax return for fiscal 2020-21, then you will be on the list of non-tax filers and have to face higher tax deduction at source from this financial fear. The Central Board of Direct Taxes (CBDT) has issued a circular to determine the non-filers, or “specified person” who are subject to higher tax withholding or collection for FY 2022-23, while relaxing some of the guidelines.
According to the circular, if the ITR was not filed for the relevant previous fiscal year and the aggregate TDS and tax collected at source exceeded Rs 50,000 that year, it would attract a high TDS. Banks will be required to check if an individual has met both conditions to attract a higher TDS.
During FY23, no new names were added to the list of specified persons, to reduce the burden on tax deductor and collector, it said. If any specified person files a valid return of income (filed & verified) for the assessment year 2021-22 during FY23, his name would be removed from the list of specified persons. This would be done on the date of filing of the valid return of income.
Also, the provisions of Section 206AB will not apply in case of deduction of tax on transfer of virtual digital asset (VDA) under Section 1948 of the Act to a taxpayer being an individual or Hindu undivided family. This applies if the sales, gross receipts or turnover does not exceed Rs 1 crore in case of business or Rs 50 lakh in case of profession, during the financial year immediately preceding the year in which such VDA was transferred or if such person does not have any income under the head “profit and gains of business or profession”.
The circular said as per the provisions of Section 206AB & 206CCA, the specified person shall not include a non-resident who does not have a permanent establishment in India.
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