SECTION-194N: TDS ON CASH WITHDRAWAL
- Section 194N say that TDS is deducted by the payer who makes the cash payments in excess of Rs. one crore during the year to tax payer.
- PAYER includes :
- Any Bank (Private and Public Sector)
- Any Co-operative Bank
- Any Post Office
The ‘Tax Payer’ means following person who withdraw the cash during the Financial year –
- Partnership Firm
- Local Authority
- Association of Person (AOP)
- Body of Individual (BOI)
Above mentioned section will not apply on following categories of person:
- Any Government Body
- Any Bank including Cooperative Bank
- Any business correspondent of all banking Co
- Any white label ATM operator of any bank
- Any other notified by the government
RATE OF TDS/ INCOME TAX
- TDS is 2% on cash payment or withdrawal of more than of rupee one crore during a financial year.
- This is not the TDS. It is Income Tax and will not be refundable or adjust against the tax liability
- The limit of Rs. One Crore is for each bank account in a bank or post office. It means if a person three bank account in three bank than he can withdraw the cash of Rs. Three Crore in a financial year.