In order to discourage cash transactions and move towards less cash economy, Section 194N was inserted vide Finance Act, 2019 (No.2). Following table shows the summarised details of the said section
|
Section |
194N |
|
W.e.f |
01-09-2019 |
|
Deductor |
a) Any Banking company
b) A co-operative Bank
c) A post office,
|
|
Deductee |
Any person except following a) Any government body
b) Any bank including co-operative banks
c) Any business correspondent of a banking company (incl. co-operative banks)
d) Any white label ATM operator of any bank (incl. co-operative banks)
e) Any other person notified by the government
|
|
Transaction |
Cash Withdrawals |
|
Threshold |
Rs. 1 crore (TDS will be deducted on the amounts withdrawn in excess of Rs. 1 crore) |
|
Rate |
2% |
|
Time of deduction |
At the time of withdrawal |
New Update
The Finance Act 2020 has extended the scope of the section to include persons who have not filed their Income tax returns for immediate preceding 3 Assessment Years.
With effect from 01-07-2020, if the recipient(deductee) has not filed ITR for all the 3 immediate preceding Assessment Years following will be rates of TDS u/s 194N for such person:
|
Withdrawal Amount |
Rate |
|
0 to Rs. 20 lakhs |
0% |
|
Rs. 20 Lakhs to Rs. 1 Crore |
2% |
|
Above Rs. 1 Crore |
5% |
CAclubindia
