TDS us 194N
This query is : Resolved
26 July 2020
Tds deducted u/s 194N but this not my income, at the time of bifurcation of tds under which head it will be shown?
If I choose other sources then it will be taxed and 2nd option is exempt income.
Should I proceed with exempt income
If I choose other sources then it will be taxed and 2nd option is exempt income.
Should I proceed with exempt income
26 July 2020
Dear Satyam
TDS u/s 194N will be deducted on cash withdrawal above a certain limit. Unlike other TDS provisions, it is not TDS on any income. Therefore question about showing it as income from other sources and then showing it as exempt income does not arise.
TDS u/s 194N will be deducted on cash withdrawal above a certain limit. Unlike other TDS provisions, it is not TDS on any income. Therefore question about showing it as income from other sources and then showing it as exempt income does not arise.
26 July 2020
Dear Sir,
at the time of ITR while filling schedule TDS 2(1) tds other than TDS on salary:
we have to choose"Head of Income" and which is mandatory then which head should I choose for TDS 194N?
26 July 2020
Dear Satyam,
I think such issue will be addressed in the ITR forms for AY 2021-22 i.e when you file the return in July 2021.
27 July 2020
Dear Raj Sir,
this is applicable for AY 2020-21. there is an amendment that is applicable from 1st july2020.
02 August 2025
Got you! About **TDS under Section 194N** (which is TDS on cash withdrawals above a threshold):
* This TDS **is not deducted on any income**, but on cash withdrawals, so it doesn’t relate to any “head of income” like salary, business, or other sources.
* When filing your ITR, currently the form **requires you to mention a “Head of Income” for all TDS entries**, but since 194N TDS is not on income, this creates confusion.
* **Practical approach:**
* If the ITR form doesn’t have a specific option for TDS under section 194N, the closest way is to select **“Exempt Income”** as the head, because this TDS does not pertain to taxable income.
* Alternatively, if the ITR form gets updated in later AYs, they may add a specific head for such TDS (like “Other than Income”), but until then, **Exempt Income** is the logical choice.
* Importantly, this TDS will **not be added to your taxable income**, nor will it be considered for income tax liability. It is just deducted at source on cash withdrawals and can be claimed back (if eligible) or adjusted against your total tax liability.
---
**Summary:**
* TDS u/s 194N = tax on cash withdrawal, **not income tax on income.**
* Show it as **Exempt Income** while filing return (if forced to select a head).
* Keep the TDS certificate to claim credit.
---
If you want, I can help you fill out the exact fields in ITR or provide sample entries!
* This TDS **is not deducted on any income**, but on cash withdrawals, so it doesn’t relate to any “head of income” like salary, business, or other sources.
* When filing your ITR, currently the form **requires you to mention a “Head of Income” for all TDS entries**, but since 194N TDS is not on income, this creates confusion.
* **Practical approach:**
* If the ITR form doesn’t have a specific option for TDS under section 194N, the closest way is to select **“Exempt Income”** as the head, because this TDS does not pertain to taxable income.
* Alternatively, if the ITR form gets updated in later AYs, they may add a specific head for such TDS (like “Other than Income”), but until then, **Exempt Income** is the logical choice.
* Importantly, this TDS will **not be added to your taxable income**, nor will it be considered for income tax liability. It is just deducted at source on cash withdrawals and can be claimed back (if eligible) or adjusted against your total tax liability.
---
**Summary:**
* TDS u/s 194N = tax on cash withdrawal, **not income tax on income.**
* Show it as **Exempt Income** while filing return (if forced to select a head).
* Keep the TDS certificate to claim credit.
---
If you want, I can help you fill out the exact fields in ITR or provide sample entries!
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