If tds u/s 194 n is deducted on lower cash withdrawal than specified limit..what will the process to stop it..is there any form to be filled for the same?
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Process for stopping 194 n tds deduction if the limit is lower
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| Section 194N requires banks to deduct TDS on cash withdrawals above Rs. 1 crore (or Rs. 20 lakh for non-filers). Here is how to get relief: 1. Section 194N Basics: - TDS @ 2% on cash withdrawals exceeding Rs. 1 crore per financial year from a bank account (cumulative across all accounts in one bank) - For persons who have not filed ITR for 3 preceding years: TDS @ 2% above Rs. 20 lakh and @ 5% above Rs. 1 crore 2. Lower/Nil Deduction Certificate (Section 197): - If your actual cash withdrawal need is legitimate and you want to avoid TDS, apply for a Lower/Nil Deduction Certificate under Section 197 - Apply on IT portal: e-File → Income Tax Forms → Form 13 → Select Section 194N → Fill details of estimated cash withdrawal and tax liability - The AO examines and issues a certificate authorising the bank to deduct at a lower rate or nil rate - Submit the certificate to your bank — bank will deduct at the certified rate 3. Alternate Route — Self-Declaration: - Section 197A provides self-declaration in Form 15G/15H — but these are NOT applicable for Section 194N (they apply only to interest, dividends, etc.) - For 194N, Form 13 / Section 197 certificate is the only legal route 4. If TDS Already Deducted: TDS deducted under 194N is reflected in Form 26AS and can be claimed as a tax credit in your ITR 5. Practical Advice: Plan cash withdrawals to stay below Rs. 1 crore per financial year per bank relationship. Splitting accounts across banks does NOT help — the threshold is monitored cumulatively per account in one bank |
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