CHAPTER XVII — COLLECTION AND RECOVERY OF TAX · B.—DEDUCTION AT SOURCE
CHAPTER XVII — COLLECTION AND RECOVERY OF TAX · B.—DEDUCTION AT SOURCE
Section 206AB — Special Provision for Non-Filers (Higher TDS) (Omitted)
Case Laws & Commentary · Income-tax Act, 1961 (as amended by the Finance Act, 2026) · bharattax.co Treatise
Status: Omitted by the Finance Act, 2025 with effect from 1 April 2025.
Finance Act, 2026: No amendment (omitted with effect from 1 April 2025).
Mechanism: Required higher-rate deduction on non-filer 'specified persons'; no operation for deductions on or after 1 April 2025 (omitted with its TCS twin section 206CCA).
Litigation profile: None. Omitted and unlitigated — the candour rule applies.
A. SECTION COMMENTARY
Section 206AB was a 'special provision for deduction of tax at source for non-filers of income-tax return'. It required tax to be deducted at a higher rate (broadly twice the otherwise-applicable rate, or 5%, whichever was higher) where the deductee was a 'specified person' — one who had not furnished the return of income for the relevant preceding year(s) and whose aggregate TDS/TCS exceeded ₹50,000 in that year. It was the TDS counterpart of section 206CCA (its TCS twin) and was intended to coerce return-filing by raising the cost of default.
Omitted by the Finance Act, 2025
Section 206AB (with its TCS twin section 206CCA) was omitted by the Finance Act, 2025 with effect from 1 April 2025, as a deliberate simplification. The compliance burden it cast on deductors — who had to verify, for every deductee, whether he was a 'specified person' (eased in practice only by the departmental compliance-check utility) — was found to outweigh its yield. For deductions on or after 1 April 2025 there is no higher-rate obligation under section 206AB.
A spent, now-omitted provision — candour
During its currency section 206AB was mechanical and generated no significant body of judicial authority; the difficulties were compliance-related rather than interpretive. In candour, it is recorded for completeness; nothing turns on it for deductions on or after its omission.
B. STATUTORY POSITION (verbatim text)
Reproduced from the Income-tax Act, 1961 as amended up to the Finance Act, 2025 (the Finance Act, 2026 makes no amendment to this section). Editorial markers “***” denote text omitted by the Legislature.
206AB.Omitted by the Finance Act, 2025, w.e.f. 1-4-2025.
C. AUTHORITIES
Candour rule strictly observed: section 206AB is omitted (w.e.f. 1 April 2025) and was unlitigated. Noted for completeness, with its TCS twin section 206CCA.
No authority — legislative note
Higher TDS on non-filers; omitted with effect from 1 April 2025
Principle: Section 206AB required higher-rate deduction on a 'specified person' (non-filer with TDS/TCS over ₹50,000); it was omitted by the Finance Act, 2025 (with section 206CCA) with effect from 1 April 2025, removing the higher-rate obligation for deductions on or after that date.
Use: States the historic operation and the current (omitted) position.
Compiled for the bharattax.co Treatise on the Income-tax Act, 1961 (as amended by the Finance Act, 2026). Statutory text is reproduced verbatim from the bare Act; case-law citations have been web-verified. Where a section is new, narrow or substantially unlitigated, the candour rule is observed — the absence of direct authority is stated and only genuinely cognate authority is offered. This digest is for professional reference and is not a substitute for the official report of any judgment.
CHAPTER XVII — COLLECTION AND RECOVERY OF TAX · B.—DEDUCTION AT SOURCE
Section 206AB — Special Provision for Non-Filers (Higher TDS) (Omitted)
Case Laws & Commentary · Income-tax Act, 1961 (as amended by the Finance Act, 2026) · bharattax.co Treatise
Status: Omitted by the Finance Act, 2025 with effect from 1 April 2025.
Finance Act, 2026: No amendment (omitted with effect from 1 April 2025).
Mechanism: Required higher-rate deduction on non-filer 'specified persons'; no operation for deductions on or after 1 April 2025 (omitted with its TCS twin section 206CCA).
Litigation profile: None. Omitted and unlitigated — the candour rule applies.
A. SECTION COMMENTARY
Section 206AB was a 'special provision for deduction of tax at source for non-filers of income-tax return'. It required tax to be deducted at a higher rate (broadly twice the otherwise-applicable rate, or 5%, whichever was higher) where the deductee was a 'specified person' — one who had not furnished the return of income for the relevant preceding year(s) and whose aggregate TDS/TCS exceeded ₹50,000 in that year. It was the TDS counterpart of section 206CCA (its TCS twin) and was intended to coerce return-filing by raising the cost of default.
Omitted by the Finance Act, 2025
Section 206AB (with its TCS twin section 206CCA) was omitted by the Finance Act, 2025 with effect from 1 April 2025, as a deliberate simplification. The compliance burden it cast on deductors — who had to verify, for every deductee, whether he was a 'specified person' (eased in practice only by the departmental compliance-check utility) — was found to outweigh its yield. For deductions on or after 1 April 2025 there is no higher-rate obligation under section 206AB.
A spent, now-omitted provision — candour
During its currency section 206AB was mechanical and generated no significant body of judicial authority; the difficulties were compliance-related rather than interpretive. In candour, it is recorded for completeness; nothing turns on it for deductions on or after its omission.
B. STATUTORY POSITION (verbatim text)
Reproduced from the Income-tax Act, 1961 as amended up to the Finance Act, 2025 (the Finance Act, 2026 makes no amendment to this section). Editorial markers “***” denote text omitted by the Legislature.
206AB.Omitted by the Finance Act, 2025, w.e.f. 1-4-2025.
C. AUTHORITIES
Candour rule strictly observed: section 206AB is omitted (w.e.f. 1 April 2025) and was unlitigated. Noted for completeness, with its TCS twin section 206CCA.
No authority — legislative note
Higher TDS on non-filers; omitted with effect from 1 April 2025
Principle: Section 206AB required higher-rate deduction on a 'specified person' (non-filer with TDS/TCS over ₹50,000); it was omitted by the Finance Act, 2025 (with section 206CCA) with effect from 1 April 2025, removing the higher-rate obligation for deductions on or after that date.
Use: States the historic operation and the current (omitted) position.
Compiled for the bharattax.co Treatise on the Income-tax Act, 1961 (as amended by the Finance Act, 2026). Statutory text is reproduced verbatim from the bare Act; case-law citations have been web-verified. Where a section is new, narrow or substantially unlitigated, the candour rule is observed — the absence of direct authority is stated and only genuinely cognate authority is offered. This digest is for professional reference and is not a substitute for the official report of any judgment.