CBDT Notifies Compliance Check Functionality for Section 206AB & 206CCA

The Central Board of Direct Taxes (CBDT) notifies Compliance Check Functionality for Section 206A8 & 206CCA of Income Tax Act 1961 Vide Notification No. 01 of 2022 dated 9th June 2022.

The Notification is Given Below:

Section 206AB and 206CCA of the Income-tax Act, 1961 (effective from 1st July 2021) and amended via Finance Act, 2022), imposed higher TDS/TCS rate on the “Specified Person”.

For the purposes of this section, “specified person” means a person who has not furnished the return of income for the assessment year relevant to the previous year immediately preceding the financial year in which tax is required to be deducted, for which the time limit for furnishing the return of income under sub-section (1) of section 139 has expired, and whose total tax deducted at source and tax collected at source is rupees fifty thousand or more in his case.

Provided, however, that a non-resident who does not have a permanent establishment in India is not included in the designated person.

Explanation: For the purposes of this section, the term “permanent establishment” refers to a fixed place of business where the enterprise’s business is conducted entirely or partially.

To facilitate Tax Deductors and Collectors in identification of Specified Persons as defined in sections 206AB and 206CCA, the Central Board of Direct Taxes (“CBDT”), in exercise of powers conferred under section 138(1)(axi) of Income-tax Act, 1961 (Act), has issued Order via F.No. 225/67/2021/ITAT dated 21.06.2021 , directing that Director General of Income-tax (Systems), New Delhi shall be the specified income-tax authority for furnishing information to the Tax Deductor/Tax Collector, having registered in the reporting portal of the Project Insight through valid TAN, to identify the ‘Specified Persons’ for the purposes of section 206AB and 206CCA of the Act through the functionality “Compliance Check for Section 206AB & 206CCA”.

The Internal Revenue Service has published a Compliance Check for Section 206AB & 206CCA functionality to help tax deductors and collectors determine if a person is a “Specified Person” as defined by section 206AB & 206CCA. This capability is provided by the Income-tax Department (https://report.insight.gov.in). Regarding the use of functionality under sections 206AB and 206CCA of the Income-tax Act, 1961, please see CBDT Circular No. 11 of 2021 dated 21.06.2021 and CBDT Circular No. 10 of 2022 dated 17.05.2022.

Under the “Compliance Check for Section 200AB & 206CCA” feature page, the Circular also specifies the Bulk Search method.

To utilise the feature in Bulk Search mode, pick the “Bulk Search” tab. The steps in this mode are as follows: i. Preparing a PAN-containing request (input) file: CSV Template to enter PAN details can be downloaded from the “Bulk Search” page by clicking the “Download CSV template” button. The downloadable CSV template can be used to enter PANs that require “Specified Person” status. The current limit on the number of PANs in a single file is 10,000. ii. Uploading the CSV input file: The Upload CSV button can be used to upload the input CSV file. The status of the uploaded file will change to Uploaded, and the output CSV will be downloaded. CSV file containing “Specified Person” after processing. The status of the entered PANs as per sections 206AB and 206CCA will be available for download, and the “Status” will change to Available,” according to the circular.

To Read Full Notification Download PDF Given Below: