CBDT Notification 45 & 46 of 2024: RBI is excluded from the category of “Specified Persons” who would otherwise face higher TDS/TCS rates due to non-filing of ITR.
The Central Board of Direct Taxes (CBDT) has issued Notifications 45 and 46 of 2024, excluding the Reserve Bank of India (RBI) from the list of “Specified Persons” for the purposes of higher Tax Deducted at Source (TDS) and Tax Collected at Source (TCS) rates in case of non-filing of Income Tax Returns (ITR).
Key Highlights:
Exemption for RBI from Higher TDS/TCS Rates:
1. TDS (Section 206AB): The RBI is excluded from the category of “Specified Persons” who would otherwise face higher TDS rates due to non-filing of ITR.
2. TCS (Section 206CCA): Similarly, the RBI is exempted from higher TCS rates under the same circumstances.
Detailed Explanation:
1. Section 206AB Provisions:
Section 206AB mandates higher TDS rates for specified persons who fail to file their ITR. The higher of the following rates is applied:
(i) Twice the rate specified in the relevant provision of the Act.
(ii) Twice the rate or rates in force.
(iii) 5%.
A “specified person” refers to an individual who has not filed their ITR for the assessment year immediately preceding the financial year in which tax is to be deducted, provided the deadline under Section 139(1) has expired and the total TDS and TCS is ₹50,000 or more in that year.
Exclusions to the definition of “specified person” include:
(i) Non-residents without a permanent establishment in India.
(ii) Individuals not required to furnish an ITR for the relevant assessment year as notified by the Central Government.
2. Section 206CCA Provisions:
Section 206CCA specifies higher TCS rates for non-filing of ITR, with the rates being the higher of:
(i) Twice the rate specified in the relevant provision of the Act.
(ii) 5%.
The TCS rate under this section is capped at 20%.
A “specified person” under this section is defined similarly to Section 206AB, with the same monetary threshold and assessment year conditions.
Exemptions include:
(i) Non-residents without a permanent establishment in India.
(ii) Individuals exempted by the Central Government notification.
Conclusion:
The CBDT’s Notifications 45 and 46 of 2024 provide a clear exemption for the Reserve Bank of India from being categorized as a “Specified Person” for higher TDS and TCS rates due to non-filing of ITR. This move ensures that the RBI is not subject to the stringent tax provisions applied to other entities under Sections 206AB and 206CCA.
Stay updated with the latest tax notifications and ensure compliance to avoid higher TDS/TCS rates. For more information, visit the official CBDT website or consult with a tax professional.
To Access the Notification No. 45/2024 CLICK HERE
To Access the Notification No. 46/2024 CLICK HERE
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