Quick Summary
TDS on cash withdrawal means that if you take out a large amount of cash from your bank account, the bank might cut a small part of it as tax before giving you the money. This tax is called Tax Deducted at Source (TDS). It’s a rule by the Income Tax Department to keep track of big cash transactions
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TDS on cash withdrawal is a tax deducted at source by banks or post offices when you withdraw cash exceeding certain limits from your account. It's a measure to track large cash transactions and prevent tax evasion.
For regular taxpayers, TDS applies if cash withdrawals exceed INR 1 crore in a financial year, at a rate of 2%. For those who haven't filed ITR for the past 3 years, TDS is 2% on withdrawals over INR 20 lakh and 5% on withdrawals over INR 1 crore.
Banks (private, public, co-operative) and post offices are responsible for deducting TDS on cash withdrawals exceeding the specified limits under Section 194N of the Income Tax Act.
Yes, the TDS limit applies individually to each bank account. If you have multiple accounts in different banks, each account has its own withdrawal limit before TDS is applied.
No, the TDS limit is calculated based on the total cash withdrawn from an account within a financial year, not on a per-transaction basis.
Yes, TDS can be applicable to both savings and current accounts if the total cash withdrawal within the financial year crosses the specified limits.
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