The 60-second version
Section 206AB adds higher TDS if you did not file ITR for two preceding years — returning NRIs must file belated returns and check AIS before vendor payments trigger extra deduction.
File belated ITR to drop off specified-person list before vendor season
Section 206AB requires deductors to withhold at higher of prescribed rate or 5% extra TDS if payee is a specified person — non-filer for two preceding years with aggregate TDS ≥ INR 50,000.
Returning NRIs often miss prior-year ITR during transition — file belated return under Section 139(4) before accepting freelance or rent payments.
TCS mirror: Section 206C TCS guide for remittance withholding on non-filers.
206AB triggers
| Condition | Effect | Fix |
|---|---|---|
| No ITR 2 prior years | Specified person | File belated ITR |
| TDS ≥ INR 50K | Listed | Check AIS |
| Deductor payment | +5% TDS | Give PAN + proof |
| Filed ITR | Removed next qtr | Monitor 26AS |
206AB avoidance
Check AIS
Specified person flag.
File ITR
Belated if missed.
26AS verify
TDS credits.
Notify vendor
Updated compliance.
Form 197
Lower TDS if eligible.
Flow
206AB kit
- AIS download.
- Prior ITR ack.
- PAN.
- 26AS.
- Vendor letters.
Need help with Tax & Residency?
Share your blocker in one line. Our experts will reply with practical next steps.
Freelance trap
Clients may deduct 206AB TDS on your first invoice if you are still flagged — file ITR before billing.
Quick visual
Animated decision map
Community signal
What to watch in real discussions
Search community threads for the exact phrase, then treat repeated complaints as risk signals rather than official advice.
Open nofollow community search ->Interactive checkpoint
Turn this guide into a decision file
0 of 4 checked
Who is specified person?
Non-filer for two preceding years with aggregate TDS/collectee ≥ INR 50,000.
NRI exempt?
No — applies once you are Indian resident payee with PAN.
How to remove?
File ITR for missing years — list updates quarterly.
Extra rate?
Higher of normal rate or normal + 5%.
206CCA?
Buyer-side higher TCS mirror — file ITR to avoid both 206AB and 206CCA flags.
Form 197?
Lower TDS certificate if tax liability lower.
Your tax year is already running.
RNOR status, exit timing, and DTAA benefits all depend on decisions you make before you land. Don't guess.