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Section 294 N

prashant Kumar Singh (student) (246 Points)

18 September 2020

tds on cash withdrawal is applicable on partnership firm if withdrawn amount is more than 20 lack & upto 1 crore & previous year return is not filled.

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Sagar Patel (Tax and Business Consultant) (11611 Points)
Replied 18 September 2020

The Bank ect. will have to deduct TDS at the rate of 2% on the cash payments/withdrawals of more than Rs 1 crore in a financial year under Section 194N.

In case the Person receiving the money has not filed income tax return for three years immediately preceding the year, then the TDS is 2% on the cash payments/withdrawals of more than Rs 20 lakh and up to Rs 1 crore, and 5% for withdrawal exceeding Rs 1 crore.

So, TDS is applicable in your case, if your preceding 3 Years return has not been filed.. otherwise applicable Only after crossing limit of 1 Crore.

CA Sunil Kumar (Chartered Accountant) (4514 Points)
Replied 18 September 2020

TDS is applicable on cash withdrawal limit exceeds 1 crore rupees and bank shall deduct TDS @ 2% of sum exceeding Rs. 1 Crore

And In case the recipient has not filed the income tax return for preceding 3 financial years: TDS will be deducted at 2% on Rs. 20 lakhs to 1 crore amount withdrawn and 5% on the amount exceeding Rs. 1 crore during the financial year.