SECTION 194N of the Income Tax Act will be applicable w.e.f 01st September 2019 ( Tomorrow ).
BANKS and POST OFFICES to deduct TAX FROM CASH WITHDRAWALS EXCEEDING Rs. 1 crore :
In order to discourage cash transactions and move towards less cash economy, a new Section 194N has been proposed to be inserted in the Income-tax Act. As per this new provision, tax shall be deducted by a banking company or co op. bank or post office at the rate of 2% from the amount withdrawn in cash from any account (saving or current account) if the aggregate of the amount of withdrawal exceeds Rs. 1 crore during the year.
However, no tax shall be deducted if amount is withdrawn from the bank or post office by following recipients:
1. Central or State Government
2. Banks
3. Co-op. Banks
4. Post Office
5. Banking correspondents
6. White label ATM operators
7. Other persons notified by the Govt. in consultation with the RBI.
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