CHAPTER XVII — COLLECTION AND RECOVERY OF TAX · BB.—COLLECTION AT SOURCE (TCS)
CHAPTER XVII — COLLECTION AND RECOVERY OF TAX · BB.—COLLECTION AT SOURCE (TCS)
Section 206CCA — Special Provision for Higher TCS for Non-filers of Return (Omitted)
Case Laws & Commentary · Income-tax Act, 1961 (as amended by the Finance Act, 2026) · bharattax.co Treatise
Status: Omitted. Inserted by the Finance Act 2021 (w.e.f. 1-7-2021); omitted by the Finance Act 2025 with effect from 1 April 2025 (together with its TDS twin, section 206AB).
Finance Act, 2026: No amendment. The Finance Act 2026 makes no change (the section already stands omitted from 1 April 2025).
Mechanism: While in force, imposed a higher rate of TCS (twice the specified rate or 5%, whichever higher; capped at 20%) on amounts received from a non-filer 'specified person', operating alongside section 206CC.
Litigation profile: Candour rule. Short-lived (1-7-2021 to 31-3-2025) and now omitted; no reported case law of its own. Cognate law: section 206CC and section 206AB.
A. SECTION COMMENTARY
Section 206CCA was the TCS twin of section 206AB. Inserted by the Finance Act 2021 with effect from 1 July 2021 and amended in 2022 and 2023, it imposed a higher rate of collection — twice the specified rate or five per cent, whichever was higher, capped at twenty per cent — on amounts received from a 'specified person', broadly a non-filer of returns whose aggregate TDS and TCS was fifty thousand rupees or more in the relevant year, with carve-outs for a non-resident without a permanent establishment and a person not required to file. It operated alongside section 206CC, so that a collectee who was both a non-filer and PAN-defaulter could face the higher of the two regimes.
Omission by the Finance Act 2025
Section 206CCA has been omitted by the Finance Act 2025 with effect from 1 April 2025, together with its TDS twin section 206AB. The legislative rationale was that the higher-rate-for-non-filers mechanism imposed a heavy compliance and verification burden on collectors (who had to check the 'specified person' status of every counterparty through the Department's utility) and blocked working capital, for limited net revenue gain. From 1 April 2025 the provision has no application; for periods up to 31 March 2025 the omitted text continues to govern (reproduced in the editorial note in Part B below).
B. STATUTORY POSITION (verbatim text)
Reproduced from the Income-tax Act, 1961 as amended up to the Finance Act, 2025. Section 206CCA stands omitted by the Finance Act 2025 with effect from 1 April 2025; the pre-omission text is set out in the editorial note for reference. The Finance Act 2026 makes no change.
Special provision for collection of tax at source for non-filers of income-tax return.
206CCA. [Omitted by the Finance Act, 2025, w.e.f. 1-4-2025.]
[Editorial note — Prior to its omission, section 206CCA, as inserted by the Finance Act, 2021 (Act No. 13 of 2021), w.e.f. 1-7-2021 and later amended by the Finance Act, 2022, w.e.f. 1-4-2022 and the Finance Act, 2023, w.e.f. 1-4-2023/1-7-2023, provided for collection of tax at source at higher rates (twice the specified rate or five per cent, whichever is higher, subject to a ceiling of twenty per cent) on amounts received from a "specified person" — broadly, a person who had not furnished the return of income for the assessment year relevant to the previous year immediately preceding the financial year of collection, for which the time limit under section 139(1) had expired, and whose aggregate of TDS and TCS was rupees fifty thousand or more in that year, excluding a non-resident without a permanent establishment in India and a person not required to furnish the return. The section operated in tandem with section 206CC and with its TDS twin, section 206AB (also omitted by the Finance Act, 2025, w.e.f. 1-4-2025).]
C. AUTHORITIES
Section 206CCA was operative only between 1 July 2021 and 31 March 2025 and has generated no reported case law of its own; the candour rule is observed. Its scheme tracked section 206CC (PAN-default) and its TDS twin section 206AB.
Cluster 1 — Omitted provision; no direct authority
No reported decision construes section 206CCA. It is now omitted (Finance Act 2025, w.e.f. 1-4-2025). The only cognate material is the law on its companion provisions, section 206CC and section 206AB.
No direct authority — candour note
Position: Diligent search discloses no reported Supreme Court, High Court or Tribunal decision construing section 206CCA on its merits. The provision was short-lived (1 July 2021 to 31 March 2025) and largely self-operating through the Department's compliance utility.
Cognate treatment: Disputes, if any, would borrow from the section 206CC analysis (PAN-default cannot override a treaty rate — Danisco India 404 ITR 539 (Del), by analogy) and from the general principle that a higher-rate collection provision is machinery, not a charge (A. Sanyasi Rao 219 ITR 330 (SC); GE India Technology 327 ITR 456 (SC)).
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, spent 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 · BB.—COLLECTION AT SOURCE (TCS)
Section 206CCA — Special Provision for Higher TCS for Non-filers of Return (Omitted)
Case Laws & Commentary · Income-tax Act, 1961 (as amended by the Finance Act, 2026) · bharattax.co Treatise
Status: Omitted. Inserted by the Finance Act 2021 (w.e.f. 1-7-2021); omitted by the Finance Act 2025 with effect from 1 April 2025 (together with its TDS twin, section 206AB).
Finance Act, 2026: No amendment. The Finance Act 2026 makes no change (the section already stands omitted from 1 April 2025).
Mechanism: While in force, imposed a higher rate of TCS (twice the specified rate or 5%, whichever higher; capped at 20%) on amounts received from a non-filer 'specified person', operating alongside section 206CC.
Litigation profile: Candour rule. Short-lived (1-7-2021 to 31-3-2025) and now omitted; no reported case law of its own. Cognate law: section 206CC and section 206AB.
A. SECTION COMMENTARY
Section 206CCA was the TCS twin of section 206AB. Inserted by the Finance Act 2021 with effect from 1 July 2021 and amended in 2022 and 2023, it imposed a higher rate of collection — twice the specified rate or five per cent, whichever was higher, capped at twenty per cent — on amounts received from a 'specified person', broadly a non-filer of returns whose aggregate TDS and TCS was fifty thousand rupees or more in the relevant year, with carve-outs for a non-resident without a permanent establishment and a person not required to file. It operated alongside section 206CC, so that a collectee who was both a non-filer and PAN-defaulter could face the higher of the two regimes.
Omission by the Finance Act 2025
Section 206CCA has been omitted by the Finance Act 2025 with effect from 1 April 2025, together with its TDS twin section 206AB. The legislative rationale was that the higher-rate-for-non-filers mechanism imposed a heavy compliance and verification burden on collectors (who had to check the 'specified person' status of every counterparty through the Department's utility) and blocked working capital, for limited net revenue gain. From 1 April 2025 the provision has no application; for periods up to 31 March 2025 the omitted text continues to govern (reproduced in the editorial note in Part B below).
B. STATUTORY POSITION (verbatim text)
Reproduced from the Income-tax Act, 1961 as amended up to the Finance Act, 2025. Section 206CCA stands omitted by the Finance Act 2025 with effect from 1 April 2025; the pre-omission text is set out in the editorial note for reference. The Finance Act 2026 makes no change.
Special provision for collection of tax at source for non-filers of income-tax return.
206CCA. [Omitted by the Finance Act, 2025, w.e.f. 1-4-2025.]
[Editorial note — Prior to its omission, section 206CCA, as inserted by the Finance Act, 2021 (Act No. 13 of 2021), w.e.f. 1-7-2021 and later amended by the Finance Act, 2022, w.e.f. 1-4-2022 and the Finance Act, 2023, w.e.f. 1-4-2023/1-7-2023, provided for collection of tax at source at higher rates (twice the specified rate or five per cent, whichever is higher, subject to a ceiling of twenty per cent) on amounts received from a "specified person" — broadly, a person who had not furnished the return of income for the assessment year relevant to the previous year immediately preceding the financial year of collection, for which the time limit under section 139(1) had expired, and whose aggregate of TDS and TCS was rupees fifty thousand or more in that year, excluding a non-resident without a permanent establishment in India and a person not required to furnish the return. The section operated in tandem with section 206CC and with its TDS twin, section 206AB (also omitted by the Finance Act, 2025, w.e.f. 1-4-2025).]
C. AUTHORITIES
Section 206CCA was operative only between 1 July 2021 and 31 March 2025 and has generated no reported case law of its own; the candour rule is observed. Its scheme tracked section 206CC (PAN-default) and its TDS twin section 206AB.
Cluster 1 — Omitted provision; no direct authority
No reported decision construes section 206CCA. It is now omitted (Finance Act 2025, w.e.f. 1-4-2025). The only cognate material is the law on its companion provisions, section 206CC and section 206AB.
No direct authority — candour note
Position: Diligent search discloses no reported Supreme Court, High Court or Tribunal decision construing section 206CCA on its merits. The provision was short-lived (1 July 2021 to 31 March 2025) and largely self-operating through the Department's compliance utility.
Cognate treatment: Disputes, if any, would borrow from the section 206CC analysis (PAN-default cannot override a treaty rate — Danisco India 404 ITR 539 (Del), by analogy) and from the general principle that a higher-rate collection provision is machinery, not a charge (A. Sanyasi Rao 219 ITR 330 (SC); GE India Technology 327 ITR 456 (SC)).
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, spent 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.