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Sandip Mukherjee

Sandip leads the International Tax Practice of FoxMandal as a Director and operates from the Pune Office He is a Chartered Accountant with over 30 years of experience in the areas of tax, regulatory & business advisory. During his career span, Sandip has led from client assignments and held leadership positions, working with Big 4 professional firms and MNCs in India as well as overseas.

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Functionality For Compliance Check under Section 206AB and 206CCA

Finance Act, 2021 had, inter alia, inserted two new sections 206AB and 206CCA, effective from 01st July 2021. These sections mandate tax deduction under section 206AB or tax collection under section 206CCA at twice the prescribed rate or 5%, whichever is higher, in case of certain “Specified Persons”.

Finance Act, 2021 had, inter alia, inserted two new sections 206AB and 206CCA, effective from 01st July 2021. These sections mandate tax deduction under section 206AB or tax collection under section 206CCA at twice the prescribed rate or 5%, whichever is higher, in case of certain “Specified Persons”.

Section 206AB is applicable to the tax withholding provisions under Chapter XVIIB, other than sections 192, 192A, 194B, 194BB, 194LBC or 194N.

‘Specified Person’ means a person who satisfies both the following conditions:

  • Has not filed 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, and the option to file return original return under section 139(1) has elapsed and
  • The aggregate of tax deducted or collected at source is Rupees fifty thousand or more in each of these two previous years.

However, the aforesaid section had increased the compliance burden of the deductor/collector to satisfy himself if the deductee/collectee is a specified person. In order to enable the deductor/collector to smoothly comply with these provisions, the Central Board of Direct Taxes (CBDT) has now introduced a new functionality “Compliance check for section 206AB & 206CCA”, which will enable the deductor/collector to check if the deductee/collectee is a “Specified Person” or not.  The CBDT has also released Quick Reference Guide and Frequently Asked Questions with respect to the compliance check. 

The Functionality is made available on the Reporting Portal of the Income Tax Department (http://report.insight.gov.in) and the deductor/collector can feed single PAN or multiple PANs (Bulk search) to obtain a report regarding such specified persons.

Modus Operandi

A list of “Specified Persons” will be prepared at the beginning of each Financial Year (FY). So, no new Specified Person will be added anytime during the Financial Year.

Compliance check for PAN of deductee/collectee is required to be done at the beginning of each financial year. The report will state whether such PAN is a “Specified Person” or not

  • In case of “Non-Specified Persons” the deductor/collector would not be required to check the status again anytime during the Financial Year.
  • In the case of “Specified Persons” the deductor/collector would need to check the updated status at the time of TDS / TCS to confirm if such PAN has not moved out from the “Specified Persons” category. This may happen because the list is prepared at the beginning of the financial year and since the last date for filing return for F.Y. 2020-21 has been extended to 30th September 2021, there may be situations where the person may move out of “Specified Persons” list due to subsequent compliance.

The above provisions are not applicable to non-residents not having a permanent establishment in India.

For the sake of ease of understanding, the steps to be followed for registration of the Principal Officer and downloading report of the specified persons has been outlined below in the form of a simple flow chart.

Procedure for Registration of the Principal Officer

The flow chart below outlines the steps to be followed for registration of the Principal Officer on the Reporting Portal:


Procedure for Downloading Report of Specified Persons

The flow chart below depicts the procedure to be followed for downloading the Report of Specified Persons using the said functionality:



It is expected that the introduction of the above compliance check facility by the Income-Tax Department will go a long way in facilitating assessees in their compliance with the arduous provisions of Sec 206 AB and Sec 206CCA. Further, it does away with the need for obtaining independent undertakings from vendors etc. vis-à-vis their return filing status. This is yet another example of the increasing use of technology by the Income-tax Department, which is certainly commendable.


*with inputs from Preeti Kothari and Nihar Tank.

Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house


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