Notwithstanding Anything Contained In Any Other Provision of The Act

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Let’s look at Notwithstanding Anything Contained In Any Other Provision of The Act meaning in detail:

The phrase notwithstanding anything in any other provision of the act would only mean that if anything inconsistent with the provision of the Act are found to have been laid down by other law, then they will have no effect.

TDS RATES IN CASE OF NON-FILING OF INCOME TAX RETURN: (Section 206AB)

Simply…..

While deducting TDS you need to check the following:

The Person of whom TDS is being deducted:

  1. Should have filed his/her/its, Income Tax Return for the previous 2 Financial Years, for which due date for Income Tax Return has already expired.

Example: You are in Financial Year 2021-22.

You are deducting TDS under Section 194C @ 2% of Mr. X (deductee) on a Basic amount of Rs. 1,00,000/-

Things to Check—

Whether Mr. X have filed their Income Tax Return for Previous 2 Financial Years for which due date of filing Income Tax Return has expired. i.e., For FY 2019-20 and 2018-19.

You can also confirm from them that what is the due date for Filing ITR for the FY 2020-21, and ask them to submit their ITR as soon as the time for FY 2020-21 expires, for continuation of lower deduction of TDS.

(Note: Non-return filing has to be checked for both FY’s. If for 1 FY also the return has been filed this section won’t apply to the said deductee).

&

  • The total TDS deducted in the above referred FY is Rs. 50,000/- or more.

For this we recommend you to take their 26AS for the relevant FY and analyse whether the amount is more than 50,000/- or not.

Continued Example:

Whether as per Mr. X’s 26AS, total TDS deducted in the FY 2019-20 and 2018-19 is equal to or more than Rs. 50,000/-.

What if? The person of Whom TDS is being deducted did not file ITR of Previous 2 Years and also the TDS deducted was equal to or more than Rs. 50,000/- for both these years.

TDS rate will be:

  1. TDS Rate normally applicable X 2.
  2. Or 5 %.

Whichever is Higher.

Continued Example:
If Mr. X has not filed his ITR in the FY 2019-20 and 2018-19 and as per their 26AS total TDS deducted is more than or equal to Rs. 50,000/- in aggregate from all parties, than TDS deduction will be 5% (2%*2= 4%, or 5%, whichever is higher).

Exceptions and Do’s and Dont’s.

  • Not applicable for Non-Residents Assesses who do not have Permanent Establishment in India.
  • This Section is not applicable in Case of TDS deduction on Salary (Section 192) or Sections: 192A, 194B, 194BB, 194LBC or 194N.
  • After crossing of every due date for filing of Income Tax do remember to take updated Income Tax returns from the deductees.
  • If the Deductee do not furnish PAN Card? Section 206AA will also applies. The TDS rate will be:
  • 20% as per 206AA

Or.

  • TDS Rate*2 as per 206AB

Whichever is higher.

Declaration Format: for 206AB, 194Q, 206C(1H)

<<< On Your Letter Head >>>

Date:

To,

Whom So Ever It May Concern

Sub:  Self Declaration of Turnover for the purpose of for the Purpose of TDS (u/s.194Q & 206AB) or TCS-[u/s.206C (1H) & 206CCA]   of Income-tax Act, 1961 of the Income-tax Act, 1961

Sir/Madam,

We hereby declare the following for our company, ____________________________, [Buyer Name] having PAN __________________& TAN: _____________:  

  1. Turnover Details:
Financial YearOur Turnover Exceeds Rs.10 Crores [ Yes  / No ]
FY 2020-21 
Assessment YearIT Return E-filing Ack. NumberDate of Filing [Filed within Due Date]Due Date as specified in Sec. 139(1)Total TDS & TCS Claimed in our IT Return is above Rs.50,000/- [ Yes or No ]
AY 2020-21    
AY 2019-20    
  • IT Returns Details: [ Applicable only for Buyers having Turnover Upto Rs.10 Crores ]

[Proof of IT Return Enclosed viz., IT Return Screen Shot taken from Income-tax Website or IT Acknowledgement]

Note-1: TDS @ 0.1% should be applied by the Buyer of Goods, if the Buyer’s Turnover exceeds Rs.10 Crore for Purchase Value over & above Rs.50 Lacs]

Note-2: If the Buyer’s Turnover is up to Rs.10 Crores, then TCS @ 0.1% [or Higher Rate based on the IT Return Filed Date] shall be collected in the Sale Invoice by the Seller, if such value exceeds Rs.50 Lacs

Thanking you

For Your Company

Signature with Name & Designation

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