TDS on Cash Withdrawal u/s 194N is a provision of the Income Tax Act, 1961, which requires a tax to be deducted at source (TDS) on cash withdrawals exceeding Rs. 1 crore in a financial year from a bank account.
This provision was introduced in the Finance Act, 2020 and is applicable from 1st April 2020.
The TDS rate applicable on cash withdrawals exceeding Rs. 1 crore in a financial year is 2%. This TDS is to be deducted by the bank at the time of withdrawal and is to be deposited with the government. The TDS deducted is to be credited to the account of the person from whom the cash is withdrawn.
The TDS on cash withdrawal u/s 194N is applicable only to individuals and Hindu Undivided Families (HUFs). It is not applicable to companies, firms, trusts, etc.
The TDS on cash withdrawal u/s 194N is applicable only to cash withdrawals from a bank account. It is not applicable to withdrawals from other sources such as ATM, credit cards, etc.
The TDS on cash withdrawal u/s 194N is applicable only to cash withdrawals exceeding Rs. 1 crore in a financial year. It is not applicable to cash withdrawals below this amount.
The TDS on cash withdrawal u/s 194N is applicable only to cash withdrawals made in India. It is not applicable to cash withdrawals made outside India.
The TDS on cash withdrawal u/s 194N is applicable only to cash withdrawals made in Indian currency. It is not applicable to cash withdrawals made in foreign currency.
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According to section 194N of the Act, TDS has to be deducted if a sum or aggregate of sum withdrawn in cash by a person in a particular FY exceeds :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?
3. To whom is TDS on cash withdrawal u/s 194N of the Act not applicable?
4. From when is TDS on cash withdrawal u/s 194N of the Act applicable?
5. At what rate is TDS on cash withdrawal u/s 194N deducted?
Good information in simple terms to understand... Hats off 🙂👍...