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TDS Higher rate w.e.f. 1.7.2021

Finance Act, 2021 has introduced a new Section 206AB w.e.f. 1st July, 2021. According to this new section, TDS will have to be deducted at a higher rate. Circumstances in which higher rate of TDS will have to be deducted:
If all the below conditions are satisfied in case of deductee:
1.Person has not filed ITR for past two years. i.e. FY 2018-19, FY 2019-20
2.Aggregate TDS/TCS of the person for these two years is Rs. 50000 or more
Rate of TDS
Higher of the following:
1.Twice the rate specified in the relevant provision of the Act i.e. if section specifies 10%, then 20% will have to be deducted
2.Twice the rate or rates in force (if modified by CBDT)
3.5%
Exception
This new section is not applicable in case of following categories of TDS

Particulars	Section
Salary	192
Premature withdrawal from the accumulated balance of the provident fund, which is taxable in the employee’s hands	192A
Winning from the card game, crossword, lottery, puzzle, or any other games	194B
Winning from a horse race	194BB
Income against investment in the securitisation trust	194LBC
Payments of certain amount/amounts in cash	194N

This new section is not applicable to deductees who are non-resident and who does not have a permanent establishment in India
Take away
A new functionality is made available on income tax portal- Compliance check for Section 206AB and 206CCA wherein can feed PAN and check if the deductee is a person specified under this Section. So every deductor has to do this compliance check and deduct rate accordingly.

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