Section 206AB → Section 240
Special provision for TDS for non-filers of income tax return
Quick Answer
Section 206AB of the Income Tax Act, 1961 (Special provision for TDS for non-filers of income tax return) corresponds to Section 240 of the Income-tax Act, 2025, effective 1st April 2026. Status: Retained.
What changed for Section 206AB
Under the Income Tax Act, 1961, Section 206AB governs special provision for TDS for non-filers of income tax return. Mandates TDS at double the rate or 5% (whichever is higher) if the payee has not filed ITR for the previous year and their TDS/TCS exceeded Rs. 50,000.
Under the Income-tax Act, 2025 (effective 1st April 2026), Section 206AB is retained and renumbered as Section 240 of the Income-tax Act, 2025. Retained. Designed to force non-filers into the tax net.
The transition impact on Section 206AB is assessed as High. Major operational check for every business during payment processing.
Sec 206AB
Provision Summary
Mandates TDS at double the rate or 5% (whichever is higher) if the payee has not filed ITR for the previous year and their TDS/TCS exceeded Rs. 50,000.
Sec 240
Provision Summary
Retained. Designed to force non-filers into the tax net.
Key Changes & Highlights
- The 'Compliance Check' utility on the portal allows deductors to bulk-check the filing status of their vendors.
Related Sections
Frequently Asked Questions
Which subject does Section 206AB of the 1961 Act cover?
Section 206AB of the Income Tax Act, 1961 covers special provision for TDS for non-filers of income tax return. Mandates TDS at double the rate or 5% (whichever is higher) if the payee has not filed ITR for the previous year and their TDS/TCS exceeded Rs. 50,000.
What is the new section number for Section 206AB under the Income-tax Act, 2025?
Section 206AB of the Income Tax Act, 1961 maps to Section 240 of the Income-tax Act, 2025, effective 1st April 2026 (status: Retained). Retained. Designed to force non-filers into the tax net.
How does the Income-tax Act, 2025 affect Section 206AB in practice?
The transition impact for Section 206AB is rated High. Major operational check for every business during payment processing.
What is new about Section 206AB under the Income-tax Act, 2025?
The 'Compliance Check' utility on the portal allows deductors to bulk-check the filing status of their vendors. These points are specific to Section 206AB (Special provision for TDS for non-filers of income tax return).
Disclaimer: This mapping of Section 206AB (Special provision for TDS for non-filers of income tax return) to Section 240 of the Income-tax Act, 2025 is for educational and reference purposes only, based on publicly available drafts and circulars. As Section 206AB is currently marked Retained, always confirm its treatment with a qualified Chartered Accountant before filing or making compliance decisions.
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