Page 93 - DHC Budget Book 2021-22 Final
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was received by the specified person. The fair market value of assets on the date of such receipt shall be deemed to be the full value of consideration.
Further, a new sub-section (4A) is proposed to be inserted to provide that where the specified person receives any money or other asset at time of dissolution or reconstruction of any specified entity, which is in excess of the balance of his capital account, it shall also be deemed
to be income of such specified entity and chargeable to tax under the head ‘Capital Gains’ in the previous year in which such money or other asset was received. The value of money or fair market value of assets shall be deemed to be the full value of consideration and the balance in
Existing provisions of Sec. 206AA provides for higher rate of TDS (20%) for non-furnishing of PAN. Further. Sec. 206CC provides for higher rate of TCS (5%) for non-furnishing of PAN.
A new Sec. 206AB is proposed to be inserted w.e.f. 01-07-2021 to provide for deduction of tax at higher rates in case of specified persons. The tax to be deducted shall be higher of the following –
twice the rate specified in the relevant provision of the Act; or
twice the rate or rates in force; or
the rate of five per cent
The above newly proposed section shall not apply to transactions where the amount of tax is required to be deducted u/s 192 (Salaries), 192A (PF), 194B (Winning from lottery etc.), 194BB (Winning from Horse races), 194LBC (income received from a securitisation trust) or 194N (Cash withdrawal exceeding H 20 lakh).
Further, if the provision of Sec. 206AA is applicable to a specified person, in addition to the provisions of this section, the tax shall be deducted at higher of the rates provided in these two sections.
Further, a new Sec. 206CCA is proposed to
be inserted w.e.f. 01-07-2021 to provide for collection of tax at higher rates from a specified person. The proposed TCS rate shall be higher of the following –
the capital account of the specified person shall be deemed to be the cost of acquisition.
For the purpose of the above proposed sections, the balance in the capital account of the specified person is to be calculated without taking into account the effect of increase in
the capital account due to revaluation of any asset, self-generated goodwill or any other self- generated asset.
Further, a consequential amendment in Sec. 48 is proposed to provide that the amount included in the total income of such specified entity u/s 45(4A), which is attributable to the capital asset being transferred, shall be reduced from the
full value of the consideration while computing income under the head ‘Capital Gains’.
twice the rate specified in the relevant provision of the Act; or
the rate of five per cent
In cases where the provision of Sec. 206CC is applicable to a specified person, in addition to the provisions of this section, the tax shall be collected at higher of the rates provided in these two sections.
The specified person for the purpose of the proposed Sec. 206AB and 206CCA shall mean a person who has not filed ROI u/s 139(1) for both PY prior to the PY in which the tax is required to be deducted and the aggregate of TDS/TCS in his case is H 50,000 or more in each of the two preceding PY in which he has not filed the ROI. Specified person shall not include non-resident who does not have a permanent establishment in India.
Comments
The proposed amendment has been inserted to discourage the practice of not filing of returns by the persons in whose case substantial amount of tax has been deducted or collected.
However, there is no clarity as to how the deductor/collector will check whether the specified person has filed the ROI or whether TDS/TCS in the last two years has been more than H 50,000.
7.25
Tightening of provision of TDS & TCS for non-filers of return [Sec. 206AB & Sec. 206CCA] [w.e.f. 01-07-2021]
Content
Others
Direct Tax 91
