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    Amendment To Section 206AB - Updates: Symptom

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    Shrddha Patil
    TDS_1

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd

    Amendment To Section 206AB - Updates: Symptom

    Uploaded by

    Shrddha Patil
    6 views3 pages
    TDS_1

    Original Title

    3031916_E_20210604

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    © © All Rights Reserved

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    TDS_1

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    6 views3 pages

    Amendment To Section 206AB - Updates: Symptom

    Uploaded by

    Shrddha Patil
    TDS_1

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 3

    2021-06-04 3031916

    3031916 - Amendment to Section 206AB - Updates


    Version 2 Type SAP Knowledge Base Article
    Language English Master Language English
    Release Status Released to Customer Category Problem
    Component XX-CSC-IN-FI (Financial Accounting) Released On 29.04.2021

    Please find the original document at https://launchpad.support.sap.com/#/notes/3031916

    Symptom

    In the recent budget for Fiscal year 2021, a new amendment was introduced with respect to higher TDS and
    TCS rates for section 206AB and 206CCA. This knowledge based article aims at helping customers to
    receive notifications regarding the solution 206AB.

    Environment

    • Financial Accounting
    • SAP ERP Central Component
    • SAP ERP
    • SAP enhancement package for SAP ERP
    • SAP enhancement package for SAP ERP, version for SAP HANA
    • SAP S/4HANA
    • SAP S/4HANA Finance
    • This is relevant for India Localization or Country India Version (CIN) component

    Cause

    Section 206AB and 206CCA-Special provision for deduction of tax at source (TDS) and collection of
    tax at source (TCS) for non-filers if income tax return at higher rates.

    These sections were introduced in the IT act to deduct TDS at higher rates respectively for non-furnishing of
    PAN.

    Now the new section 206AB have been inserted in the IT Act by the Finance Bill, 2021 where in higher rate of
    TDS to be applied, If transactions are done with non-filers of IT returns for last 2 years.

    Resolution

    The legal changes will be effective from 1st July, 2021.

    If Tax deducted/collected is of 50000 or more in the last 2 years of any individual then tax deductors is
    required to collect the ITRs for the previous 2 years.

    There is a requirement for an identifier to see if the individual has filed returns and provided the proof for the
    same in the form of ITRs for the last 2 years before July 1st. If yes then no change in the vendor master,
    however same tax type and tax code can be used.

    If the individual fails to submit the same before July 1st, then TDS to be deducted/applied at higher of the
    below rates -

    © 2021 SAP SE or an SAP affiliate company. All rights reserved 1 of 3


    2021-06-04 3031916

    1. At twice the rates specified in the relevant provision of the act


    2. At twice the rates in force
    3. At the rate of 5%

    Create New tax type and tax code at higher rate and maintain them in vendor master, don't change existing
    tax codes.

    Business need to check internally below mentioned two points, there is no standard solution from SAP.

    • whether Tax deducted/collected is of 50000 or more in the last 2 years of any individual
    • Acknowledgement of the proof for filed ITRs

    Back dated Postings : For all previous documents you can use old tax rates instead of higher rate.

    Option 1 : It is recommended to maintain the new Tax Type and Tax code with Higher rate in vendor
    master only after you processed all the documents prior to 1st July 2021, otherwise system will pick
    the higher tax rate for documents posted before July 1st as well once new tax code is assigned in
    vendor master.

    Option 2: User has to select the Tax codes manually for posting documents prior to July 1st.

    See Also

    2382863 - How to use the Announcement of Legal Changes application - SAP ONE Support Launchpad

    3044961 - TCS effective from July 1 2021

    Keywords

    TCS, TDS, Tax Collected at Source, Tax deducted at Source, India, Amendment, budget, 2021, 50000, XX-
    CSC-IN-FI, CIN, Notification, 206CCA, 206AB, XX-CSC-IN-MM, ITR, WHT, 2 years, XX-CSC-IN-SD.

    Products

    SAP ERP Central Component all versions


    SAP ERP all versions
    SAP S/4HANA Finance all versions
    SAP S/4HANA all versions
    SAP enhancement package for SAP ERP all versions
    SAP enhancement package for SAP ERP, version for SAP HANA all versions

    Other Components

    Component Description

    XX-CSC-IN-SD Sales and Distribution

    © 2021 SAP SE or an SAP affiliate company. All rights reserved 2 of 3


    2021-06-04 3031916
    XX-CSC-IN-MM Materials Management

    This document refers to

    SAP Note/KBA Title

    2382863 How to use the Announcement of Legal Changes application - SAP ONE Support Launchpad

    2381572 Stay tuned! Do not miss a legal change announcement [VIDEO]

    2348668 How to activate (add) a tile from the tile catalogue - SAP ONE Support Launchpad

    Terms of use | Copyright | Trademark | Legal Disclosure | Privacy

    © 2021 SAP SE or an SAP affiliate company. All rights reserved 3 of 3

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