TDS on Cash Withdrawals!! All about S-194N of IT Act, 1961

Payer – Banking Company, Co-op. Society or Post Office.

Payee – Any Person {including NR}

Type of Payment – Cash withdrawn from one or more accounts maintained

Time of Deduction – Payment of cash

TDS Rate – 2 % of amount in excess of limit

Limit > 1,00,00,000 {1 Crore}

Recipient who has not filed R.O.I. for all of the 3 AY’s relevant to 3 PY’s, for which the time limit to file R.O.I. u/s. 139(1) has expired, immediately preceding the PY in which cash is withdrawn.

The provisions will be modified as below –

Limit > 20,00,000 {20 Lakhs}

Upto 20,00,000 – No TDS

> 20,00,000 and < 1,00,00,000 – 2% TDS

> 1,00,00,000 – 5% TDS

Effective from On or after 01.07.2020

The limit of Rs 1 crore has to be seen for cash withdrawals made from all branches of a bank.

The cash withdrawals from two different banks shall not be aggregated for the limit of ₹ 1 Crore.

No TDS on payment made to Central or State Government/ Banks/ Co-op. Banks/ Post Office/ Banking correspondents/ ATM operators/ Commission agent or trader, operating under Agriculture Produce Market Committee (APMC)