Budget 2025: Removal of higher TDS/TCS for Non-filers of ITR:

Sec 206AB and 206CCA requires tax deduction at higher rate when deductee/collectee specified as a non-filer of ITR. To address this issue, it is proposed to omit these Sections.

Higher TDS/TCS for Non-filers of ITR removed

CA Pratibha Goyal

Feb 1, 2025

Last update on Feb 1, 2025

Budget 2025: Removal of higher TDS/TCS for Non-filers of ITR Section 206AB of the Act, requires deduction of tax at higher rate when the deductee specified therein is a non-filer of income-tax return. Section 206CCA of the Act, requires for collection of tax at higher rate when the collectee specified therein is a non-filer of income-tax return. This is subject to other conditions specified in the two sections. Representations were received from various stakeholders that it is difficult for the deductor/collector, at the time of deduction/collection, to verify whether returns have been filed by the deductee/collectee, resulting in application of higher rates of deduction/collection, blocking of capital and increased compliance burden. Accordingly, to address this issue and reduce compliance burden for the deductor/collector, it is proposed to omit section 206AB of the Act and section 206CCA of the Act. These amendments will take effect from the 1st day of April, 2025.

About Author

CA Pratibha Goyal

Co Founder

CA Pratibha Goyal is Chartered Accountant qualified in 2016, is a Member of The Institute of Chartered Accountants of India having wide experience in the field of Auditing, Taxation, ROC, GST and Secretarial matters etc. She has written over a thousand articles & has made several videos on topics related to Auditing & Taxation. As a Speaker she has delivered various sessions on various branches of NIRC of ICAI.