Section 206AB / 395 specified-person flag

A specified person under Section 395 (formerly 206AB) is one who:

1. Has not filed ITR for 2 years preceding the year in which TDS is to be deducted
2. Whose TDS + TCS in each of those 2 years exceeded ₹50,000

For such persons, TDS is at twice the specified rate or 5%, whichever is higher.

Automatic check

ThynkTax checks every deductee against the Income Tax Compliance Check API:

• Returns "Specified Person" / "Non-Specified Person"
• Updated monthly (no real-time call)
• Cached for 30 days per PAN

In the deduction flow

When you record a deduction, the system:

1. Pulls the deductee's specified-person status
2. If specified: applies the higher rate
3. If both 206AA (PAN issue) and 206AB (non-filer) apply: applies the higher of the two
4. Logs the flag check timestamp in the audit log

Exceptions

Section 395 does NOT apply to:

• Non-residents who don't have a permanent establishment in India
• Person who is required to file ITR for the first time
• Salary TDS under Section 192 (only applies to non-salary)