What is Section 206AB?
Nexa Consultancy | Startup & Finance Glossary
This section mandates a higher rate of TDS for payments made to "specified persons" who have not filed their income tax returns for the previous two years and whose aggregate TDS is ₹50,000 or more in each of those years.
Startup Example: A startup needs to pay a vendor who has not filed their ITRs. The startup must check the government's compliance portal and, if the vendor is a "specified person," deduct TDS at twice the normal rate.
This is a critical part of our enhanced TDS compliance checks.