New Rules for TDS on Cash Withdrawal w.e.f 1st July 2020

Following entities are liable to deduct the TDS on Cash Withdrawal under Section 194N of Income Tax Act, 1961:

1. Banks (including private or public sector banks)

2. Co-operative banks

3. Post office

Applicable to Amount of Cash Withdrawal in Current F/Y Rate of TDS Rate of TDS in the absence of PAN
Customers who have NOT filed their tax returns for the previous 3 years and for which the due date for filing the tax returns has expired Rs. 20 Lakhs to Rs. 1 Crore 2% 20%
Exceeding Rs. 1 Crore 5% 20%
Customers other than the above mentioned Up to Rs. 1 Crore N.A. N.A.
Exceeding Rs. 1 Crore 2% 20%

Note:

1. The above applicability of new rules is as per amendments in the Finance Act, 2020.

2. The cash withdrawal limit for this F/Y will be considered from 1st April 2020.

3. For filing of ITR for the F/Y 2018-19 last date is 31th July 2020.

4. Rate of TDS is 2% up to 30th June, 2020

5. This section shall not apply to any payment made to—

(i)  the Government;

(ii)  any banking company or co-operative society engaged in carrying on the business of banking or a post office;

(iii) any business correspondent of a banking company or co-operative society engaged in carrying on the business of banking, in accordance with the guidelines issued in this regard by the Reserve Bank of India under the Reserve Bank of India Act, 1934 (2 of 1934);

(iv) any white label automated teller machine operator of a banking company or co-operative society engaged in carrying on the business of banking, in accordance with the authorisation issued by the Reserve Bank of India under the Payment and Settlement Systems Act, 2007 (51 of 2007):

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Company: AMIT NARESH & ASSOCIATES
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3 Comments

  1. Sajith N says:

    This is applicable for only cash withdrawals, right? Does this rule affect me if I transfer funds using internet banking/ UPI/ Debit Card/ Mobile Banking/ IMPS, etc facilities?

  2. KPB NIDHI LTD says:

    WE ARE A NIDHI COMPANY REGISTERED AS A PUBLIC LTD COMPANY UNDER MINISTRY OF CORPORATE AFFAIRS. WE ARE FILING I T RETURNS REGULARLY FOR THE LAST 30 YEARS FOR OUR DAILY NEED WE HAVE TO WITHDRAW CASH FROM OUR ACCOUNTS FOR
    OUR 82 BRANCHES. PLEASE ADVISE WHETHER TDS IS APPLICABLE TO US?

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