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Step by Step Guide to Use the New Functionality of "Compliance Check for Sections 206AB & 206CCA"

The Finance Act, 2021 has inserted two new sections 206AB and 206CCA in the Income-tax Act 1961 w.e.f. 1.7.2021. These sections mandate tax deduction or tax collection at higher rate in case of certain non-filers / "Specified Persons". Higher rate is twice the prescribed rate or 5%, whichever is higher.

"Specified Person" means a person who has not filed the returns of income for both of the two assessment years relevant to the two previous years immediately prior to the previous year in which tax is required to be deducted, for which the time limit of filing return of income under section 139(1) has expired; and the aggregate of tax deducted at source and tax collected at source in his case is Rs. 50,000 or more in each of these two previous years. However, the specified person shall not include a non-resident who does not have a permanent establishment in India.

To implement these two provisions, the Apex Body CBDT has issued a new functionality "Compliance Check for Sections 206AB & 206CCA". This functionality is already functioning through reporting portal of the Income-tax Department.

The tax deductor/collector can feed the single PAN (PAN search) or multiple PANs (bulk search) of the deductee/ coIIectee and can get a response from the functionality if such deductee/collectee is a specified person. For PAN Search, response will be visible on the screen which can be downloaded in the PDF format. For Bulk Search, response would be in the form of downloadable file which can be kept for record.

The logic of the functionality has been explained through CBDT Circular No. 11 of 2021 dated 21st June, 2021.

This new functionality of “Compliance Check for Section 206AB & 206CCA” is available to the Principal Officers of the registered TAN at the home page of Reporting Portal of Income-tax Department (After Login).

Step by Step Guide to Use the New Functionality of "Compliance Check for Sections 206AB & 206CCA"

Registration of Tax Deductors/Collectors on Reporting Portal

To access the “Compliance Check for Section 206AB & 206CCA” functionality, tax deductors/collectors need to register through TAN on the Reporting Portal of Income-tax Department. Following steps may be followed for registration of TAN on reporting portal,

Step: 1           Go to Reporting Portal at URL https://report.insight.gov.in.

Step: 2           On the left sidebar of the Reporting Portal homepage, click on Register button.

Step: 3           User is redirected to the e-filing login page. Or

Step: 4           Directly navigated to e-filing portal through http://www.incometax.gov.in/

Step: 5           Log in to e-filing using e-filing login credential of TAN.

Step: 6           Under “Pending Actions”, select “Reporting Portal”.

Step: 7           After being redirected to the Reporting portal, select New Registration option and click Continue.

Step: 8           On the next screen, select the Form type as Compliance Check (Tax Deductor & Collector). The Entity Category will be displayed based on the category in which TAN is registered at e-filing. Click Continue to navigate to entity details page.

Step: 9           Enter relevant entity details on entity details page and click on “Add Principal Officer” button to add Principal Officer.

Step: 10       Enter Principal Officer details on the Principal Officer Details page.

Step: 11        If more users such as Nodal Officer, Alternate Nodal Officer and other users are to be registered at this instance, adding the details of such users can be continued, otherwise the same can be done after registration also.

Step: 12       Click on Preview button to view the entered entity and principal officer details.

Step: 13       Click on Submit button to submit the registration request.

Step: 14 Acknowledgement receipt of registration request is provided through portal and the same will also be shared through an email notification to the Principal Officer.

Step: 15 Once the registration request is approved by Income tax Department, email notification will be shared with the Principal Officer along with ITDREIN details and login credentials.

Accessing the functionality on Reporting Portal – by Principal Officer

Step: 1      Go to Reporting Portal at URL https://report.insight.gov.in.

Step: 2      On the left sidebar of the Reporting Portal homepage, click the Login button.

Step: 3    Enter the required details (of Principal Officer) in the respective fields (PAN and Password as received in the email or updated password) and click Login to continue.

Step: 4    If Principal Officer’s PAN is registered for multiple Forms & ITDREIN, he/she needs to select Form type as Compliance Check (Tax Deductor & Collector) and associated ITDREINs from the drop-down.

Step: 5      After successfully logging in, the home page of Reporting Portal appears.

Step: 6 Click on Compliance Check for Section 206AB & 206CCA link provided as shortcut on left panel.

Compliance Check for Section 206AB & 206CCA

Upon clicking Compliance Check for Section 206AB & 206CCA at home page, the compliance check functionality page appears. Through the functionality, tax deductors or collectors can verify if any person (PAN) is a “Specified Person” as defined in Section 206AB & 206CCA.

The same can be done in two modes:

• PAN Search: To verify for single PAN
• Bulk Search: To verify for PANs in bulk

PAN Search (Single PAN Search)

Step 1: Select PAN Search tab under Compliance Check for Section 206AB & 206CCA

functionality.

Step 2: Enter valid PAN & captcha code and click Search.

Following Output result will be displayed upon entering a valid PAN & captcha code. Output result will not be shown if Invalid PAN is entered.

Output Result-

• • Financial Year: Current Financial Year
  • PAN: As provided in the input.
  • Name: Masked name of the Person (as per PAN).
  • PAN Allotment date: Date of allotment of PAN.
  • PAN-Aadhaar Link Status: Status of PAN-Aadhaar linking for individual PAN holders as on date. The response options are Linked (PAN and Aadhaar are linked), Not Linked (PAN & Aadhaar are not linked), Exempt (PAN is exempted from PAN-Aadhaar linking requirements as per Department of Revenue Notification No. 37/2017 dated 11th May 2017) or Not-Applicable (PAN belongs to non-individual person).
  • Specified Person u/s 206AB & 206CCA: The response options are Yes (PAN is a specified person as per section 206AB/206CCA as on date) or No (PAN is not a specified person as per section 206AB/206CCA as on date).

Output will also provide the date on which the “Specified Person” status as per section 206AB and 206CCA is determined.

Step 3: Click PDF icon to download the details in PDF format.

Bulk Search

Step 1: Select “Bulk Search” tab.

Step 2: Download the CSV Template by clicking on “Download CSV template” button.

Step 3: Fill the CSV with PANs for which “Specified Person” status is required. (Provided PANs should be valid PANs and count of PANs should not be more than 10,000).

Step 4: Upload the CSV by clicking on “Upload CSV” button.

Step 5: Uploaded file will start reflecting with Uploaded status. The status will be as follows:

• • • Uploaded – The CSV has been uploaded and pending for processing.
    • Available – Uploaded CSV has been processed and results are ready for download.
    • Downloaded – The user has downloaded the output results CSV.
    • Link Expired - Download link has been expired.

Step 6: Download the output result CSV once status is available by clicking on Available link.

Step 7: After downloading the file, the status will change to Downloaded and after 24 hours of availability of the file, download link will expire and status will change to Link Expired.

Output Result (CSV):

Output result CSV file will have following details:

• • • Financial Year: Current Financial Year
    • PAN: As provided in the input. Status shall be “Invalid PAN” if provided PAN does not exist.
    • Name: Masked name of the Person (as per PAN).
    • PAN Allotment date: Date of allotment of PAN.
    • PAN-Aadhaar Link Status: Status of PAN-Aadhaar linking for individual PAN holders as on date. The response options are Linked (PAN and Aadhaar are linked), Not Linked (PAN & Aadhaar are not linked), Exempt (PAN is exempted from PAN-Aadhaar linking requirements as per Department of Revenue Notification No. 37/2017 dated 11th May 2017) or Not-Applicable (PAN belongs to non-individual person).
    • Specified Person u/s 206AB & 206CCA: The response options are Yes (PAN is a specified person as per section 206AB/206CCA as on date) or No (PAN is not a specified person as per section 206AB/206CCA as on date).

Output will also provide the date on which the “Specified Person” status as per section 206AB and 206CCA is determined.

For Ready Reference of our Readers, the Screenshots of the Real-time Templates Demonstrating the Entire Process of the Use of the New Functionality of "Compliance Check for Sections 206AB & 206CCA, is also enclosed as per PDF File enclosed below.