Slide
MEET by Quicko

Section 206AB and 206CCA of Income Tax Act

author portrait

Maharshi Shah

Income Tax
Section 206AB
Section 206CCA
Last updated on July 24th, 2021

Section 206AB and 206CCA are the latest addition to the Income Tax Act. The introduction of the new section is for the deduction and collection of tax at source at higher rates if an amount is paid or payable to the specified person who did not file the income tax return. The new section will be applicable from 1st day of July 2021.

What is Section 206AB and 206CCA?

Section 206AB deals with the deduction of TDS at the higher rate to those who have not filed their income tax return. Whereas, Section 206CCA deals with the collection of tax at source at a higher rate received from the buyers.

Tax Compliance APIs
Let’s break down the new section 206AB and 206CCA & visualize it with a logical framework
View Blog
Tax Compliance APIs
Let’s break down the new section 206AB and 206CCA & visualize it with a logical framework
View Blog

Rates for Deduction or Collection of Tax under section 206AB and 206CCA

TDS

Tax will be deducted at the higher of the following rates:

TCS

Tax will be collected at the higher of the following rates:

TDS Calculator
TDS (Tax Deducted at Source) is a part of Income Tax. TDS should be dedcuted by a person for specific payments made.
Explore
TDS Calculator
TDS (Tax Deducted at Source) is a part of Income Tax. TDS should be dedcuted by a person for specific payments made.
Explore

Applicability of Section 206AB and 206CCA

The section 206AB and 206CCA are not applicable to a non-resident who does not have a permanent establishment in India. Furthermore, provisions of section 206AB do not apply to any sum or income or amount paid or payable or credited on which tax is otherwise deducted at source under below-mentioned provision of Chapter XVIIB:

The section 206AB and 206CCA are applicable to specified persons:

FAQs

Does section 206AA override DTAA?

The DTAA provides for a rate of 10% whereas as per the provisions of Section 206AA of the Act, the rate of tax deduction at source is 20%. The plea of the revenue was that section 206AA starts with a non-obstante clause and therefore it overrides all other provisions of the Act including 90(2), 115A and 139A.

What is Section 206AA?

Section 206AA requires every taxpayer who receives taxable income to furnish their PAN to the payer of such income. This applies to both the resident as well as non-resident recipients.

Got Questions? Ask Away!

  1. Additionally, The new section will be applicable from 1st day of July 2021.

  2. Hey Kriti,
    These sections will be applicable if you have missed to file your ITR for 2 consecutive years. Hope this helps :slight_smile:

  3. It assess download 26as details mentioned below in f.y.20-21.
    Sec 206 1G(A)
    Name of collector : ICICI Bank Ltd
    Amount deposit:1,24,520/-
    Total tcs paid:nil
    Question:
    Assess sec 206 1G(A) rs:1,24,520/- amount how to treatment procedure in books and it returns.

  4. Hi @Sundaraiah_Kollipara, if the foreign remittance that you have received is from an income, then that amount has to be declared.
    If it is not an income, and is something like a transfer of funds or gift from family, the income can be declared under exempt income.

Continue the conversation on TaxQ&A

1 more reply

Participants