CA.R.S.KALRA
Quick Summary
[Applicable from September 1, 2019] 194N. Every person, being,- a banking company to which the Banking Regulation Act, 1949 (10 of 1949) applies (including any bank or banking institution referred to in section 51 of that Act); a co-operative society engaged in carrying on the business
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FAQ :
Section 194N requires banking companies, co-operative societies, and post offices to deduct TDS at a specified rate when paying cash amounts exceeding certain limits to any person from accounts maintained with them.
For recipients who have filed income tax returns for the past three years, TDS applies to cash withdrawals exceeding ₹1 crore. For those who haven't filed returns for the past three years, TDS applies to cash withdrawals exceeding ₹20 lakh.
If you've filed income tax returns, the TDS rate is 2% on cash withdrawals exceeding ₹1 crore. If you haven't filed returns for the past three years, the rate is 2% on withdrawals exceeding ₹20 lakh up to ₹1 crore, and 5% on withdrawals exceeding ₹1 crore.
Yes, TDS is not required on payments made to the Government, any banking company, co-operative society, post office, business correspondents, or white label ATM operators, among others notified by the government.
Yes, Section 194N applies to cash withdrawals made by both resident and non-resident individuals in India.
The limit of ₹1 crore is considered for aggregate cash withdrawals made from all branches of a single bank within a financial year.
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