\u201cThe purpose of this circular is to bring more non-filers within the ambit of tax filers,\u201d says Rohit Arora, advocate, Uttarakhand High Court.<\/p>\n\n\n\n
Definition of specified person<\/strong><\/p>\n\n\n\n According to the Finance Act, 2022, a \u2018specified person\u2019 is one who fulfils two conditions. The first is that this person did not file his\u00a0ITR<\/a>\u00a0in the previous year.<\/p>\n\n\n\n Suresh Surana, founder, RSM India, says, \u201cThe previous year should be the one whose due date for return filing under Section 139(1) has expired.\u201d<\/p>\n\n\n\n Surana further explains that earlier a higher TDS\/TCS<\/a>\u00a0rate applied to persons who had not filed their returns for two previous years. Now, a higher rate will apply if a person does not file a tax return for one year.<\/p>\n\n\n\n The second condition is that the aggregate of\u00a0TDS<\/a>\u00a0and\u00a0TCS<\/a>\u00a0to be collected from this person should be Rs 50,000 or more in the previous year.<\/p>\n\n\n\n The higher rate that will apply will be double the prescribed rate or 5 per cent, whichever is higher.<\/p>\n\n\n\n Section 206AB and Section 206CCA<\/strong><\/p>\n\n\n\n Section 206AB provides information on a higher\u00a0TDS<\/a>\u00a0rate that will apply while making payments to a person on the list.<\/p>\n\n\n\n It does not apply to certain incomes and transactions.<\/p>\n\n\n\n Section 206CCA provides information on the higher TCS rate that has to be collected from a specified person.<\/p>\n\n\n\n Financial institutions can use the I-T department\u2019s reference guide called \u2018Compliance Check for Section 206AB and 206CCA\u2019 to ascertain whether a higher TDS\/TCS applies to a person.<\/p>\n\n\n\n The implications<\/strong><\/p>\n\n\n\n A list of specified persons, on whom higher TDS\/TCS rate will apply in 2022-23, has been prepared, taking FY21 as the relevant financial year. No new names will be added to this list during FY 2022-23.<\/p>\n\n\n\n Further, if the specified person files valid\u00a0ITR<\/a>\u00a0(filed and verified) for FY 2021-22 (AY 2022-23), then his name will be removed from the list.<\/p>\n\n\n\n
Archit Gupta, chief executive officer, Clear, says, \u201cIt is not applicable to tax deduction on salary; premature withdrawal of Employees Provident Fund; winnings from a lottery, card game, or crossword puzzle; income for investment in a securitisation trust; winnings from a horse race; and cash withdrawals.\u201d<\/p>\n\n\n\n
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