What is the rate of TDS on cash withdraw form Bank or Post office

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SECTION-194N
TDS on heavy cash withdraw from Banks/ Post
office
VINOD K AGRAWAL ASSOCIATES, CA
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Introduction

• With the change to the Finance Act of 2020,
  section 194N was replaced with 83A, which applies
  a 2 TDS on withdrawals of more than Rs. 1 crore.
• This clause went into effect on July 1, 2020.

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Who are the person including

• Individuals
• HUF
• Company
• Partnership firms or LLP
• Local authorities
• Any association of Person (AAOP) or Body of
  Individuals (BOI)
• Any other assesses

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What is the limit to withdraw cash?

• TDS is levied on cash withdrawals in excess of
  Rs. 1 crore in a financial year under section
  194N.

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Under this organization, who is responsible to
deduct TDS

1. Any bank covered under Banking Regulation Act,
   1949
2. A co-operative society carrying on the business
   of banking
3. A post office

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Person who are exempted under section 194N

• If the cash are withdrawn from the following
  beneficiaries, no tax will be deducted
• Banks
• Cooperative societies
• Operators of white-label ATMs
• Any other person whom the central government has
  notified in consultation with the RBI.
• Post office
• Banking correspondents
• Central or State governments

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WHAT IS THE RATE OF TDS?

• 2 on cash withdrawal if the amount exceed Rs. 1
  crore

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The limit of tax deduction is 20 lakh if a person
has failed to file the ITR for the previous 3
financial years.

• _at_ 2 on the amounts withdrawn from 20 lacs to Rs.
  1 cr. And
• _at_ 5 in excess of withdrawal of Rs. 1 crore.

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VINOD K AGRAWAL ASSOCIATES, CA