Special Functionality tab “Compliance Check for Sections 206AB & 206CCA” on Income-Tax Department Portal

Blog   wpadmin   August 12, 2021

Executive Summary:

      • The article covers the detailed analysis of the circular issued by Ministry of Finance bearing Circular No. 11/2021, dated 21st June 2021 with respect to functionality tab on Income Tax Department portal, i.e., “Compliance Check for Sections 206AB & 206CCA” of Section 206AB and 206CCA of the Income-tax Act, 1961.


The Finance Act, 2021 has inserted two new sections i.e., 206AB and 206CCA in the Income-tax Act 1961 which takes effect from 1st day of July, 2021. These sections mandate tax deduction (section 206AB) or tax collection (section 206CCA) at a higher rate in case of certain non-filers (specified persons) with respect to tax deductions (other than under sections 192, 192A, 194B, 194BB, I 94LBC and I 94N) and tax collections. Higher rate is twice the prescribed rate or 5%, whichever is higher. These provisions however have the following exceptions:

  • A non-resident not having a permanent establishment in India is not a specified person.
  • Furthermore, the provisions of Section 206AB do not apply to any aggregate, Income or any amount spent, yet to be paid or credited on which tax is otherwise deducted at source in accordance with provisions of the chapter XVIIB.

Who will come under the category of Specified Persons?

A Specified person means a person who has not filled the Income tax returns for preceding Two Financial years immediately before the previous year in which tax is required to be deducted /collected. Two previous years to be counted are required to be those whose return filing date under sub-section (1) of section 139 has expired and whose Aggregate of tax deducted at source and tax collected at source is rupees fifty thousand or more in each of these two previous years.

Special Functionality tab “Compliance Check for Sections 206AB & 206CCA”

To ease the burden on the tax deductor or tax collector, of determining whether he is a specified person, the Income Tax Department has implemented a new “Compliance Check Functionality tab for Section 206AB and 206CCA” so as to assist the TDS and TCS taxpayers in following the compliance requirements of these sections.

Advantages of the Functionality Tab:

Eases compliance burden

This newly introduced tab will reduce the burden of compliance over the concerned parties and increase the efficiency in filing returns of the persons who have not filled the same for past two years.

Identification of specified person

The tax deductor/collector must enter a single Permanent Account Number (PAN search) or several PANs (bulk search) of the deductee/coIIectee to identify the specified person.

Use of PAN Search Mode

This mode will enable to search the PAN of the persons in a quick fashion. The results of the PAN search will be displayed on the screen and can be downloaded in PDF format. The response for a bulk PAN search will be in the form of a downloaded file that may be saved for future reference.

How can we check this “Compliance Functionality”?

  • i. This functionality is made available through reporting portal of the Income-tax Department.
  • ii. The tax deductor or the collector can feed the single PAN (PAN search) or multiple PANs (bulk search) of the deductee or coIIectee and can get a response from the functionality if such deductee or collectee is a specified person.
  • iii. TDS/TCS deductor and collectors can use the online utility to check a single PAN or several PANs at the same time.
  • iv. For PAN Search, response will be visible on the screen which can be downloaded in the PDF format.
  • v. For Bulk Search, response would be in the form of a downloadable file which can be kept for record.

To alleviate the effort of verifying PANs again, the IT department has provided that PAN(s) which are previously checked in the financial year and designated as non-specified do not need to be re-checked.

Once the list of specified persons has been prepared in the beginning of financial year then any addition of names to such list shall not be allowed. Though there may be a chance that a specified person may move out from the list in the year at any time. Hence rechecking must be conducted while deductions and collections of such specified persons.


Tax payment acts as an instrument of economic policy and we being citizen of Country are bound to pay the tax for the effective democratic governance. The amount of tax affects the total volume of production, consumption, investment, choice of industrial location and techniques, balance of payments, distribution of income, and governance of the country. Hence, the introduction of new sections 206AB and 20CCA, as discussed hereinabove will definitely help to track down the individuals who are not filing their income tax returns; And also will able to penalize them at higher rate. This new tab will definitely increase the efficiency of the Income tax Department in regard to tracking the people not filing an Income tax return just at one click.

Legal Team

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