Widening the tax base and encouraging tax filing has always been the prime focus of government. Finance Act, 2021 has enacted certain provisions which will be very effective in achieving this target of government. Finance Act, 2021 has enacted the provisions for higher rate of TDS and TCS for non filers of Income Tax return.
As per the provisions enacted, if anyone has not filed his Income Tax return for last two previous year, his TDS and TCS shall be deducted / collected at higher rate. Rate as prescribed is twice the applicable rate. Similar provision was enacted vide Finance Act, 2020 in section 194N where bank was required to deduct higher rate of TDS of non filers of return.
In this write up we have discussed about the provisions and procedural aspect of the above provisions of TDS and TCS which will give you insight about these provisions for higher deduction of TDS / TCS.