How to Configure New TDS Requirement to Deduct TDS at Higher Rates as per Section 206AB?
(Doc ID 2772755.1)
Last updated on JULY 02, 2021
Applies to:Oracle Financials for India - Version 12.1.1 and later
Information in this document applies to any platform.
The Finance Act 2021 has a "Special provision for deduction of tax at source for non-filers of income-tax return." After section 206AA of the Income Tax Act, a new section 206AB (I) has been added as per the special clause. In addition, if one does not have a PAN, the tax deduction limit will be even higher.
As per Budget 2021, this new TDS rule will be effective from 01-JUL-2021. As a result, a separate section 206AB to the Act has been added as a special clause that allows for a higher TDS rate for non-filers of income-tax return.
TDS rates to be highest of the following:
1. Twice the rate stated in the applicable section of the Income Tax Act,
2. Twice the existing rate or rates,
3. Rate of 5%.
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