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CBDT (Central Board of Direct Taxes) has issued a functionality to verify whether the vendors have filed a tax return for compliance of Section 206AB and Section 206CCA. The decision has been welcomed by the stakeholders.
Section 206AB & section 206CCA inserted in the Income-tax Act, 1961 via Finance Act, 2021 will be effective from the 1st day of July, 2021. These sections mandate tax deduction or tax collection at a higher rate in the case of specified persons. The higher rate is twice the prescribed rate or 5%, whichever is higher.
Read: CBDT issues functionality for Compliance Check for Sections 206AB & 206CCA
To ease this compliance burden the Central Board of Direct Taxes has issued a new functionality “Compliance Check for Sections 206AB & 206CCA”. This functionality is already functioning through the reporting portal of the Income-tax Department (https://report.insight.gov.in). Through the compliance check facility, the tax deductors/collectors can verify if a person is a “Specified Person” as defined in Section 206AB & 206CCA.
To access the “Compliance Check for Section 206AB & 206CCA” functionality, tax deductors/collectors need to register through TAN on the reporting portal of the Income-tax Department. After successful registration, the user can verify if any person is a “Specified Person” as defined in Section 206AB & 206CCA.
Below steps should be followed for registration of TAN on the reporting portal to access the Compliance check facility:
Once the login credentials are generated, the principal officer can log in on the reporting portal at https://report.insight.gov.in. After logging in, the home page of reporting portal appears, click on the “Compliance Check for Section 206AB & 206CCA” link.
On the compliance check functionality page, 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.
If the user wants to verify the single PAN then the user needs to select the PAN Search tab under “Compliance Check for Section 206AB & 206CCA” functionality. The user needs to provide a valid PAN to get the output. User will get the below-mentioned details in the output:
If the user wants to do a compliance check for multiple PANs the user needs to select the “Bulk Search” tab. Download the CSV Template by clicking on the “Download CSV Template” button. CSV template should contain the PANs for which “Specified Person” status is required. (Count of PANs should exceed 10,000).
The user has to upload the CSV file by clicking on “Upload CSV”. Once the CSV file is uploaded, a link will be generated to download the output result CSV file.
The Output result CSV file will contain the same result as the result came while checking for a single PAN i.e. Current financial year, PAN-Aadhaar linking status, and the response, whether the PAN is a specified person or not. The output will also provide the date on which the “Specified Person” status as per section 206AB and 206CCA is determined.
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