The higher TCS is applicable for individuals who have failed to file their tax returns for FY2019 and FY2020.
Earlier this year, the Central Board of Direct Taxes (CBDT) launched a new functionality on the income tax portal to check for compliance of Sections 206AB and 206CCA. It helps deductors or collectors to identify individuals for whom a TCS of 5% would be applicable.
The higher TCS is applicable for individuals who have failed to file their tax returns for FY2019 and FY2020, and the aggregate of TDS or TCS is Rs. 50,000 or more in each of these years. If a person files valid returns for the aforementioned fiscals, he/she would be removed from the list of “specified persons”.
So, if you’re planning to purchase a new vehicle, make sure you have filed your tax returns on time. Else, be ready to pay an additional 5% TCS over and above the 0.75% TCS which is charged on vehicles that cost above Rs. 10 lakh.
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