194n TDS on Cash Withdrawal | TDS on Cash Withdrawal From Bank | FAQ

194n TDS on Cash Withdrawal | TDS on Cash Withdrawal From Bank | FAQ

1. What is TDS on cash withdrawal u/s Section 194N about?
According to section 194N of the Act, TDS has to be deducted if a sum or aggregate of sum withdrawn in cash by a person in a particular FY exceeds :

₹ 20 lakh (if no ITR has been filed for all the three previous AYs), or
₹ 1 crore (if ITRs have been filed for all or any one of three previous AYs).
2. Who deducts TDS on cash withdrawal u/s 194N of the Act?
TDS is deducted by banks (private, public, and co-operative) or post offices. The tax is deducted when making any cash payment to any person in excess of ₹ 20 lakh or ₹ 1 crore (as the case may be) from his/her account maintained with such banks or post offices.

3. To whom is TDS on cash withdrawal u/s 194N of the Act not applicable?
TDS on cash withdrawal u/s 194N will not apply to withdrawals made by the following persons:

Central or state government
Private or public sector bank
Any cooperative bank
Post office
Business correspondent of any bank
White label ATM operator of any bank
Central government specified commission agents or traders operating under Agriculture Produce Market Committee (APMC) for making payment to the farmers on account of purchase of agriculture produce
Authorized dealers and its franchise agent and sub-agent and Full-Fledged Money Changer (FFMC) licensed by RBI and its franchise agents
Any other person notified by the Government in consultation with RBI.
4. From when is TDS on cash withdrawal u/s 194N of the Act applicable?
TDS on cash withdrawal u/s 194N of the Act is applicable starting 1st September 2019, or FY 2019-2020.

5. At what rate is TDS on cash withdrawal u/s 194N deducted?
TDS will be deducted at a rate of 2% on cash withdrawals in excess of ₹ 1 crore if the person withdrawing the cash has filed income tax return for any or all three previous AYs.
TDS will be deducted at 2% on cash withdrawals of more than ₹ 20 lakh and 5% for withdrawals exceeding ₹ 1 crore if the person withdrawing the cash has not filed ITR for any of the preceding three AYs.

Link of website:-
https://www.incometax.gov.in/iec/fopo...