TDS on cash withdrawal: The era of online payment is over now. But still many people deal in cash. Obviously you have to pay cash. For this, you can withdraw cash from the bank. But did you know that you may have to pay TDS on cash withdrawals 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 of the TDS Act (Section 194N of the TDS Act), a person has to pay TDS if a person withdraws cash aggregating to an aggregate amount exceeding Rs 20 lakh during a financial year. Also note that this limit is applicable if he has not filed income tax returns for the last three consecutive assessment years.
According to the official website of Income Tax, if a person has filed all or any income tax return in the last three assessment years, then if he makes an aggregate cash withdrawal of more than Rs. To pay TDS. have to pay
Who can deduct TDS on cash
Banks or post offices deduct TDS on cash withdrawals in excess of the prescribed limit. It is deducted when cash in excess of Rs 20 lakh to Rs 1 crore is withdrawn from that person’s bank or post office account in a financial year.
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 cannot pay TDS To do.
How much TDS is deducted
TDS at the rate of 2% will be deducted on cash withdrawal exceeding Rs 1 crore if the cash withdrawal person has filed Income Tax Return (ITR) for any or all the three previous assessment years.
In addition, there will be a deduction of 2% on cash withdrawals above Rs 20 lakh and 5% on withdrawals exceeding Rs 1 crore if the person who has made cash withdrawals in the last three years has not filed ITR.