Double TDS : Non Filing of income tax return by due date...
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Budget 2022 proposed that if you haven’t filed your income-tax returns for a year, you will need to pay a higher TDS (tax deducted at source). Earlier, this window was two years. But there is a catch.
The due date to file your returns for income earned in 2021-22 is coming up in July 2022 (unless it gets pushed back due to COVID-19 related reasons as it has been in the last two years). In simple words, if you have not filed returns for income earned in 2020-21, you will need to file your returns by July 2022 to avoid paying a higher TDS.
What is TDS?
With the financial year coming to an end, if you are making rental payments, selling property or receiving dividend or fixed deposit interest, 1-20% of the amount is deducted as the levy commonly called tax deducted at source (TDS).
To enhance the tax base, non-tax filers were forced to pay double the TDS if returns for the past two years were not filed. Sudhir Kaushik, co-founder, TaxSpanner.com, said, “The move is being planned to increase tax compliance and reduce the number of non-filers. The higher TDS deduction will bring in awareness about tax filing and ensure they are financially punished if they do not file a tax return.”
This rule is applicable to anyone whose aggregate TDS liability is above Rs 50,000 per year and it is not applicable to income from salary. TDS is levied on payments to non-resident Indians and high-value sales, too.
Compulsion to file return by due date
Though the change looks like a halfway mark, it actually means a much shorter period due to the difference between financial year and assessment year (tax-filing year).
“The fine print has linked the provisions to Section 139-1, which means if you do not file the return by the due date, then you would be liable to pay a higher TDS. For instance, if you haven’t filed your tax return for assessment year 2022-23 by July 31, 2022, and one has to pay the rent to you in August 2022, then the tenant would have to deduct double the TDS from you on the rent as you haven’t filed the return for the past year,”
So the interpretation is that you would have to file the return by the due date or pay TDS at double the rate.
Author...
CA. Dr. Gaurav Bhambri
Category : Income Tax | Comments : 0 | Hits : 5610
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