TDS on cash withdrawal: Experts say that file Income Return (ITR). This also has an effect on cash withdrawals.
TDS on cash withdrawal: The era of online payment is now over. But still many people deal in cash. Obviously you have to pay cash. For this you withdraw cash from the bank. But do you know that you may have to pay TDS on cash withdrawal after a certain limit. TDS on cash withdrawal under section 194N of the Income Tax Act is applicable from 1st September 2019 or from the financial year 2019-2020.
Annual cash withdrawal limit
Under section (194N section 194N of TDS Act) of the TDS Act, if a person withdraws a total amount of more than 20 lakh rupees in cash during a financial year, then he has to pay TDS. Also note that this limit is applicable if he has not filed income tax return for the last three consecutive assessment years.
According to the official website of Income Tax, if a person has filed all or any of the Income Tax Returns in the last three assessment years, then if he withdraws cash in aggregate more than Rs 1 crore in a financial year, then he will have to pay TDS on the cash. Will have to pay
Who can deduct TDS on cash
Banks or post offices deduct TDS for withdrawing cash in excess of the prescribed limit. It is deducted when cash is withdrawn from the account of that person in the bank or post office in a financial year, more than 20 lakh to 1 crore rupees. Yes, if you are a central or state employee, a bank, a post office, a business correspondent of a bank, an operator of a white level ATM of a bank or a person notified by the government on the advice of RBI, then he does not have to pay TDS.
How much TDS is deducted
TDS at the rate of 2% will be deducted on cash withdrawals above Rs 1 crore if the cash withdrawal person has filed Income Tax Return (ITR) for any or all three previous assessment years.
Apart from this, TDS will be deducted at 2% on cash withdrawal above Rs 20 lakh and 5% on withdrawal of more than Rs 1 crore if the cash withdrawal person has not filed ITR for any of the last three years.