How to Check Tax Filing Status for the New Section 206 Compliance

The Finance Act, 2021, has inserted two new Sections 206AB and 206CCA, with effect from 01-07-2021. These sections provide for deduction or collection of tax at a higher rate in the case an assessee has not filed a tax return. CBDT has issued a new functionality on the income tax portal to ease the compliance burden on tax deductors or collectors.

This functionality is made available through the reporting portal of the Income-tax Department. The tax deductor or the collector can feed the single PAN (PAN search) or multiple PANs (bulk search) of the deductee or collectee and can get a response from the functionality if such deductee or collectee is a specified person. For PAN Search, the response will be visible on the screen, which can be downloaded in PDF format. For Bulk Search, the response would be in the form of a downloadable file that can be kept for record.

Below is a brief explanation of how the income tax portal is designed to work for this purpose.

a) A list of specified persons is prepared at the start of the financial year 2021-22, taking previous financial years 2018-19 and 2019-20 as the two relevant previous years. The list contains the name of taxpayers who did not file a return of income for both assessment years 2019-20 and 2020-21 and have an aggregate of TDS and TCS of Rs. 50,000 or more in each of these two previous years.

b) During the financial year 2021-22, no new names are added to the list of specified persons.

c) If any specified person files a valid return of income (filed & verified) for the assessment year 2019-20 or 2020-21 during the financial year 2021-22, his name would be removed from the list of specified persons. This would be done on the date of filing of the valid return of income during the financial year 2021-22.

d) If any specified person files a valid return of income (filed & verified) for the assessment year 2021-22, his name would be removed from the list of specified persons. This will be done on the due date of filing of return of income for A. Y. 2021-22 or the date of actual filing of valid return (filed & verified), whichever is later.

e) If the aggregate of TDS and TCS, in the case of a specified person, in the previous year 2020-21, is less than Rs. 50,000, his name would be removed from the list of specified persons. This would be done on the first due date under sub-section (1) of section 139 of the Act falling in the financial year 2021-22.

f) Belated and revised TDS and TCS returns of the relevant financial years filed during the financial year 2021-22 would also be considered for removing persons from the list of specified persons on a regular basis.