Section 206AB and 206CCA: Special provision for deduction of tax at source (TDS) and Collection of tax at source (TCS) for non-filers of income-tax return:

Section 206AB and 206CCA: Special provision for deduction of tax at source (TDS) and Collection of tax at source (TCS) for non-filers of income-tax return:

*Introduced by Finance Bill 2021, inserted two new section 206AB & 206CCA. The said section provide for higher rate of TDS/TCS to be applied for the non-filers of income tax return.
* for “NON-FURNISHING OF PAN”, TDS/TCS was already deducted or collected at higher rates u/s 206AA & 206CC respectively.

206AA Tax is required to be deducted at:
(i) at the rate specified in the relevant provision of this Act;
(ii) at the rate or rates in force; or    
(iii) at the rate of 20%:    

206CC Tax is required to be collected at: 
(i) at twice the rate specified in the relevant provision of this Act;
(ii) at the rate of 5%:

Finance bill 2021 Introduced 2 sections 206AB and 206CCA in the line of these sections 

section 206AB: 
Applicability on specified person as defined in the provisions.

206AB(1)TDS rate: To be applied if the amount is paid or credited to a specified person being higher of the below rates: -

*At twice the rate specified in the relevant provision of the Act; or
*At twice the rate or rates in force; or
*At the rate of 5%.

Non applicability: The provision of sub-section (1) of section 206AB does not apply in case where tax is required to be deducted under 1942, 192A, 194B, 194BB,194LBC or 194N.

Sec. 206AB(2): provides that where both the section 206AA & 206AB are applicable i.e., the specified person has not submitted PAN as well as not filed the Income tax return, the tax 
shall be deducted at higher rate amongst the both sections respectively.

Specified Persons” Meaning:  who satisfies the following conditions:

*A person who has not filed the Income Tax Return for two previous years immediately prior to the previous year in which tax is required to be deducted;
*The time limit of filing return of income under sub-section (1) of section 139 is expired; and
*The aggregate tax deducted at source or tax collected at source, as the case maybe, is Rs. 50,000 or more in each of the two previous years.
*However, the specified persons shall not include a Non-resident who does not have Permanent Establishment (PE) in India.

Section 206CCA
206CCA(1): Rate of TCS
(i) at twice the rate specified in the relevant provision of the Act; or
(ii) at the rate of 5%.

Further, the sub-sections (2) & (3) of section 206CCA are similar to the provision of sub-sections (2) & (3) of section 206AB as explained above.