Section 206AB requires higher TDS rates for non-filers with Rs.50,000+ TDS/TCS from previous year
Section 206AB mandates higher TDS rates for non-filers of income tax returns, effective from July 1, 2021 to March 31, 2025, before being omitted by Finance Act 2025. The provision applies to most TDS payments except salary, provident fund withdrawals, lottery winnings, online game winnings, horse race winnings, property transactions, rent payments by individuals/HUFs, securities interest, contractor payments, and cash withdrawals. Tax must be deducted at the higher of twice the normal rate, twice the applicable rate, or 5%. A "specified person" is one who failed to file returns for the preceding assessment year where the filing deadline expired and had aggregate TDS/TCS of Rs.50,000 or more. Non-residents without permanent establishments in India and certain government-notified persons are excluded. When both Section 206AB and Section 206AA apply, the higher rate prevails.