Summary of Circular No. 11 Issued by the CBDT on 21st June 2021

Under Sec 206AB and 206CCA, the Deductor has to verify if the Vendor has filed the Return of Income for the Previous 2 years. If not, a higher rate of TDS will be applicable for that particular Vendor. The Income Tax and CBDT have enabled a new feature and clarified as follows:

i) A New Feature called “Compliance Check for Sec 206AB & 206CCA”will be enabled on the IT Website.

ii) The IT Department has already compiled the list of persons who have complied with the provision, as before every compliance date (known as specified persons).

iii) The Deductor needs to check if the Vendor has complied by feeding the PAN Number.

iv) If it is confirmed the Vendor has complied, it is enough if the Deductor has noted the compliance once for each Financial Year. It _NEED NOT BE CHECKED BEFORE EACH TRANSACTION IF HE HAS COMPLIED.

v) Where a Vendor has not complied, the Deductor will check before each transaction as the Vendor will move out of the specified persons list only after compliance.

vi) Belated returns will also be valid compliances to be removed from the specified persons list if it is filed within the belated due date.