Directorate of Systems vide Notification No. 1 of 2021 dated 22.06.2021 notifies the procedure for using the Compliance Check functionality for Section 206AB and Section 206CCA on the Reporting Portal of the income-tax department.
CBDT issued a Circular No. 11/2021 on 21.06.2021 regarding use of functionality under section 206AB and 206CCA and prescribed the guidelines for implementation of Compliance Check facilitates for the tax deductors/collectors to verify if a person is a “Specified Person” for the purpose of deduction of higher rate of TDS/TCS under section 206AB and section 206CCA in case of non-filing of return of income.
Read the full text of Notification No. 1 of 2021 dated 22.06.2021 on the Procedure for Compliance Check for Section 206AB & 206CCA functionality
DGIT(S)/ADG(S)-2/Compliance Check/432/2021-22
Government of India
Ministry of Finance
Central Board of Direct Taxes
Directorate of Income Tax (Systems)
Notification No. 01 of 2021
New Delhi, 22nd June, 2021
Compliance Check Functionality for Section 206AB & 206CCA of Income-tax Act 1961
Section 206AB and 206CCA inserted in the Income-tax Act,1961 (effective from 1st July 2021), imposed higher TDS/TCS rate on the "Specified Persons' defined as under,
“For the purposes of this section “specified person” means a person who has not filed the retums of income for both of the two assessment years relevant to the two previous years immediately prior to the previous year in which tax is required to be collected, for which the time limit of filing retum 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.
Provided that the specified person shall not include a non-resident who does not have a permanent establishment in India.
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.”
2. To facilitate Tax Deductors and Collectors in identification of Specified Persons as defined in sections 206AB and 206CCA, the Central Board of Direct Taxes (“CBDT”), in exercise of powers conferred under section 138(1)(a)(i) of Income-tax Act, 1961 (Act), has issued Order via F.No. 225/67/2021/ITA.II dated 21.06.2021 , directing that Director General of Income-tax (Systems), New Delhi shall be the specified income-tax authority for furnishing information to the “Tax Deductor/Tax Collector”, having registered in the reporting portal of the Project Insight through valid TAN, to identify the 'Specified Persons' for the purposes of section 206AB and 206CCA of the Act through the functionality “Compliance Check for Section 206AB& 206CCA”.
3. Income Tax Department has released a new functionality “Compliance Check for Section 206AB & 206CC” to facilitate tax deductors/collectors to verify if a person is a “Specified Person” as per section 206AB & 206CCA. This functionality is made available through (https://report.insight.gov.in) of Income-tax Department. Kindly refer to CBDT Circular No. 11 of 2021 dated 21.06.2021 regarding use of functionality under section 206AB and 206CCA of the Income-tax Act, 1961.
4. The following procedure is laid down for sharing of information with tax deductors/collectors:
a) Registration: Tax Deductors and Collectors can register on the Reporting Portal by logging in to e-filing portal (http://www.incometax.gov.in) using e-filing login credential of TAN and clicking on the link "Reporting Portal" which is available under "Pending Actions" Tab of the e-filing Portal. After being redirected to the Reporting Portal, the tax deductor/collector needs to select Compliance Check (Tax Deductor & Collector) under Form Type. The details of the principal officer also need to be provided by clicking on “Add Principal Officer” button. The principal officer is the authorized person of the tax deductor/collector to use the Compliance Check functionality on reporting portal. After submission of registration request, email notification will be shared with the Principal Officer along with ITDREIN details and login credentials.
b) Accessing the Compliance Check functionality: Principal Officers of the entities (Tax Deductors & Collectors) which are registered with the Reporting Portal through TAN shall be able to use the functionality after login into the Reporting Portal using their credentials. After successfully logging in, link to the functionality “Compliance Check for Section 206AB & 206CCA” will appear on the home page of the Reporting Portal.
c) Using "PAN Search" mode: Under the "Compliance Check for Section 206AB & 206CCA" page, “PAN Search” tab may be selected to access the functionality in PAN Search mode. In this mode single valid PAN along with captcha can be entered at a time and output will be available with following fields,
● Financial Year: Current Financial Year.
● PAN: As provided in the input.
● Name: Masked name of the Person (as per PAN).
● PAN Allotment date: Date of allotment of PAN.
● PAN-Aadhaar Link Status: Status of PAN-Aadhaar linking for individual PAN holders as on date. The response options are Linked (PAN and Aadhaar are linked), Not Linked (PAN & Aadhaar are not linked), Exempt (PAN is exempted from PAN-Aadhaar linking requirements as per Department of Revenue Notification No. 37/2017 dated 11th May 2017) or Not-Applicable (PAN belongs to non- individual person).
● Specified Person u/s 206AB & 206CCA: The response options are Yes (PAN is a specified person as per section 206AB/206CCA as on date) or No (PAN is not a specified person as per section 206AB/206CCA as on date).
● User can also click PDF icon to download the details in PDF format.
Output will also provide the date on which the “Specified Person” status as per section 206AB and 206CCA is determined.
d) Using “Bulk Search” mode: Under the “Compliance Check for Section 206AB & 206CCA” functionality page, “Bulk Search” tab may be selected to access the functionality in Bulk Search mode. This mode involves following steps:
i. Preparing request (Input) file containing PANs: Under the "Bulk Search" page, CSV Template to enter PANs details may be downloaded by clicking on "Download CSV template" button. PANs for which "Specified Person" status is required may be entered in the downloaded CSV template. The current limit in the number of PANs in a single file is 10,000.
ii Uploading the input CSV file: Input CSV file may be uploaded by clicking on Upload CSV button. Uploaded file will start reflecting with Uploaded status.
iii Downloading the output CSV file: After processing, CSV file containing "Specified Person" status as per section 20SAB & 206CCA of the entered PANs will be available for download and "Status' will change to Available. Output CSV file will contain PAN, Masked Name, Specified Person Status as per section 20SAS & 206CCA, PAN-Aadhar Link status and other details as mentioned in paragraph c) above. After downloading of the file, the status will change to Downloaded. The download link will expire and status will change to Expired after specified time (presently 24 hours of availability of the file).
5. For any further assistance, Tax Deductors & Collectors can refer to Quick Reference Guide on Compliance Check for Section 206AS & 206CCA and Frequently Asked Questions (FAQ) available under “Resources” section of Reporting Portal. They can also navigate to the “Help” section of Reporting Portal for submitting query or to get a call back from Customer Care Team of Income-tax Department. Customer Care Team of Income-tax Department can also be reached by calling on its Toll Free number 1800 103 4215 for any assistance.
6. This issues with the approval of CSDT
(Sanjeev Singh)
ADG(Systems)-2 CBDT
Download Copy of Notification No. 1 of 2021 dated 22.06.2021 on the Procedure for Compliance Check for Section 206AB & 206CCA functionality in pdf format
Update:
Read comprehensive analysis of section 206AB in this article.
Other articles on Section 206AB:
Clarification for use of functionality under section 206AB and 206CCA
CBDT Circular on Implementation of Section 206AB and Section 206CCA for non-filers
CBDT Issues Order to Launch Compliance Check Functionality for Section 206AB & 206CCA
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