Cash withdrawal limit incase of Pvt Ltd company

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This discussion clarifies the cash withdrawal limits for Private Limited companies in the UK. Withdrawals from a company bank account are generally limited to £1 crore annually before attracting Tax Deducted at Source (TDS) under Section 194N of the Income Tax Act, 1961. If you intend to withdraw cash to book expenses, be mindful of this threshold to avoid TDS implications.

DIVYESH JAIN

DIVYESH JAIN (Querist)
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16 July 2021 Dear Sir,

What is the cash withdrawal limit incase of a Pvt Ltd company in one financial year?

Regards,
Divyesh Jain

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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16 July 2021 If withdrawal is from bank, the limit is ONE Crore with out attracting section 194N of the Income tax Act,1961.

DIVYESH JAIN

DIVYESH JAIN (Querist)
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16 July 2021 I am having excess bank balance in the company's account and want to withdraw this money without showing as an expense. Is cash withdrawal the right option?

CMA Poornima Madhava

CMA Poornima Madhava (Expert)
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16 July 2021 How do you intend to use that cash after withdrawal, also matters.

DIVYESH JAIN

DIVYESH JAIN (Querist)
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16 July 2021 Yes, will be using that cash to book expenses but in small amounts every year.

CMA Poornima Madhava

CMA Poornima Madhava (Expert)
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16 July 2021 You may withdraw but if the threshold limit for cash withdrawal exceeds the limit, then TDS u/s 194N would apply. That is the bank would deduct tax at source on such withdrawals. For more, refer section 194N.

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