Special provision for deduction of tax at source for non-filers of income-tax return.

¹[206AB. (1) Notwithstanding anything contained in any other provisions of this Act, where tax is required to be deducted at source under the provisions of Chapter XVIIB, other than sections 192, 192A, 194B, 194BB, ²[194-IA, 194-IB,194LBC, 194M or 194N] on any sum or income or amount paid, or payable or credited, by a person ³[(hereafter referred to as deductee)] to a specified person, the tax shall be deducted at the higher of the following rates, namely:––

(i) at twice the rate specified in the relevant provision of the Act; or

(ii) at twice the rate or rates in force; or

(iii) at the rate of five per cent.

(2) If the provisions of section 206AA is applicable to a specified  person, in addition to the provision of this section, the tax shall be deducted at higher of the two rates provided in this section and in section 206AA.

(3) For the purposes of this section “specified person” means a person who has not ⁴[“furnished the return of income for the assessment year relevant to the previous year immediately preceding the financial year in which tax is required to be deducted, for which the time limit for furnishing the return of income under sub-section (1) of section 139 has expired and the aggregate of tax deducted at source and tax collected at source in his case is rupees fifty thousand or more in the said previous year:”] immediately prior to the previous year in which tax is required to be deducted, for which the time limit of filing return of income under sub-section (1) of section 139 has expired; and the aggregate of tax deducted at source and tax collected at source in his case is rupees fifty thousand or more in each of these two previous years:

⁵[Provided that the specified person shall not include––

(i) a non-resident who does not have a permanent establishment in India; or

(ii) a person who is not required to furnish the returnof income for the assessment year relevant to the said previous year and is notified by the Central Government in the Official Gazette in this behalf.]

Explanation.––For the purposes of this sub-section, the expression “permanent establishment” includes a fixed place of business through which the business of the enterprise is wholly or partly carried on.]

Notes:

1. Inserted by Finance Act, 2021 dated 28.03.2021 w.e.f 01.04.2021

2.Subsituted by Finance Act, 2022 dated 30.03.2022 w.e.f. 01.04.2022

in sub-section (1),for the word-

194LBC or 194N” 

The following shall be substituted-

“194-IA, 194-IB, 194LBC, 194M or 194N”

3.Omitted by Finance Act, 2022 dated 30.03.2022 w.e.f. 01.04.2022

4.Subsituted by Finance Act, 2022 dated 30.03.2022 w.e.f. 01.04.2022

in sub-section (3), for the portion beginning with the words-

“filed the returns of income” and ending with the words “each of these two previous years:”

 The following shall be substituted-

"furnished the return of income for the assessment year relevant to the previous year immediately preceding the financial year in which tax is required to be deducted, for which the time limit for furnishing the return of income under sub-section (1) of section 139 has expired and the aggregate of tax deducted at source and tax collected at source in his case is rupees fifty thousand or more in the said previous year"

5. Subsituted by the Finance Act, 2023 dated 01.02.2023 w.e.f 01.04.2023.

In sub-section (3)For the proviso-

Provided that the specified person shall not include a non-resident who does not have a permanent establishment in India.

The following proviso shall be substituted, namely:––

"Provided that the specified person shall not include––

(i) a non-resident who does not have a permanent establishment in India; or

(ii) a person who is not required to furnish the returnof income for the assessment year relevant to the said previous year and is notified by the Central Government in the Official Gazette in this behalf”.