|

Banks to check if you have filed ITR when income crosses TDS limit from July 1, levy 2X TDS if not

If you have not filed your income tax return (ITR) or do not file ITR then you might have to pay a higher amount of TDS/TCS from July 1, 2021. This is because as per an announcement made in Budget 2021, a person who has not filed ITR for the previous two financial years and the aggregate TDS and TCS deducted from payments made to him/her in each of these financial years exceeds Rs 50,000, then such person would be subjected to higher TDS rate. This will rule will come into effect from July 1, 2021.

To simplify this: Suppose you have not filed income tax returns for FY 2018-19 and 2019-20. However, you have fixed deposits, dividend income, interest from recurring deposits etc. where aggregate TDS exceeded Rs 50,000 in each financial year. In such a scenario, you will be subjected to a higher TDS rate on the incomes from July 1, 2021.
Abhishek Soni, CEO & founder, Tax2win.in says, “The objective of this newly inserted provision in the Income-tax Act, 1961 is to ensure that income tax return filing compliance is fulfilled by the taxpayers. It may happen that TDS on interest income has been deducted but ITR is not filed by the individual.

Thus, to ensure correct income is reported to the government, ITR filing will become effectively mandatory to avoid higher TDS on future income. This is similar to the rule that requires that an individual must report his/her PAN to an income payer to avoid higher TDS.” S-ToI

Similar Posts

Leave a Reply

Your email address will not be published. Required fields are marked *