SECTION 194 N: TDS ON CASH WITHDRAWAL

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  :
  1. Any Bank (Private and Public Sector)
  2. Any Co-operative Bank
  3. Any Post Office

TAX PAYER

The ‘Tax Payer’ means following person who withdraw the cash during the Financial year –

  1. Individual
  2. HUF
  3. Company
  4. Partnership Firm
  5. LLP
  6. Local Authority
  7. Association of Person (AOP)
  8. Body of Individual (BOI)

EXCEPTIONS

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.

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