CBDT prescribes compliance check functionality to facilitate tax deductors /collectors to verify “Specified Person” under Income Tax Act, 1961

Central Board of Direct Taxes (CBDT) has issued Notification No.1 of 2022 dated 9th June, 2022 to notify the procedure for tax deductors /collectors to verify if a person is a “Specified Person” as per Section 206AB relating to “Special provision for deduction of tax at source for non-filers of income-tax return” and Section 206CCA relating to “Special provision for collection of tax at source for non-filers of income-tax return” of the Income-tax Act, 1961.

Key takeaways from the Notification are:

1. The functionality  “Compliance Check for Section 206AB & 206CCA” is made available for the tax deductors/collectors to verify if a person is a “Specified Person” as per Section 206AB & 206CCA through (https:/report.insight.gov.in) of Income-tax Department.
2. The following procedure is laid down for sharing of information with tax deductors/collectors:
   1. 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.
   2. 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.
   3. 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-
      1. Financial Year:Current Financial Year
      2. PAN:As provided in the input. Name: Masked name of the Person (as per PAN).
      3. PAN Allotment date: Date of allotment of PAN.
      4. 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 May 11, 2017) or Not-Applicable (PAN belongs to non-individual person).
      5. 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).
      6. Output will also provide the date on which the “Specified Person” status as per section 206AB and 206CCA is determined.
   4. 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 involves following steps:
      1. 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.
      2. 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.
      3. Downloading the output CSV file: After processing, CSV file containing “Specified Person” status as per section 206AB & 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 206AB & 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.

For further details please refer the attached document.

^# Tax deduction at source under Section 206AB or Tax collection at source under Section 206CCA will be at higher rate in case of certain non-filers (i.e. specified person). Higher rate is twice the prescribed rate or 5%, whichever is higher.

Specified person means a person who satisfies both the following conditions:

1. He has not furnished the return of income for the assessment year relevant to the previous year immediately preceding the financial year in which tax is required to be deducted/collected . The previous year to be counted is required to be the one whose return filing date under sub-section ( I) of section 139 has expired.
2. Aggregate of tax deducted at source and tax collected at source is INR 50,000 or more in that previous year.

Provided that the specified person shall not include a non-resident who does not have a permanent establishment in India.

Source: Central Board of Direct Taxes