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Wrong classification of cash withdrawals as income

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Rattan Lal

23 Points Posted on 29 July 2023

My bank deducted TDS on cash withdrawals exceeding Rs.20 lacs during last year( I had filed ITRs for the last 3 years, but neither the bank demanded nor I provided them copies of the returns). The amount exceeding Rs.20 lacs has been clsssifed as cash withdrawals in TIS and AIS and shown u/s 194N therein, but has been shown under Sec 194NF in stead in Form 26AS. Now IT department has served me notice to show this as income in my ITR. How to get the amount corrected as cash withdrawals u/s 194N in stead of as income u/s 194NF.

Replies (4)

Quick Summary

A taxpayer faced an issue where their bank incorrectly classified large cash withdrawals as income, leading to a notice from the Income Tax department. The withdrawals, subject to TDS under Section 194N, were mistakenly shown as income under Section 194NF in Form 26AS. After consulting with the bank and their CA, a grievance was filed on the IT portal. The bank eventually clarified the error, and the IT department accepted the original ITR, correcting the classification.

Dhirajlal Rambhia

SEO Sai Gr. Hosp.

121534 Points Posted on 01 August 2023

You need to discuss the matter with Bank officers. Ask them whether your PAN is reflected in non-filer's list???

sabyasachi mukherjee

Profession

19978 Points Posted on 10 August 2023

Pls post the notice.
Cash withdrawals within limits is allowed.

jamespiche

Belle Lady

22 Points Posted on 17 August 2023

To claim credit for the taxes deducted under Section 194N, assessees must file their income tax returns in Forms ITR 2 or 3 only. The assessee can not claim credit of TDS under section 194N in ITR 1.

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Rattan Lal

23 Points Posted on 29 May 2024

I advised by Bank of the mistake they had made, enclosing statement of my account showing the cash withdrawals as well as form 26as showing them as income. Subsequently my CA raised a grievance on the IT web portal advising them of the mistake made by the Bank and how I had requested them to rectify it. It appears the Bank has advised IT department the correct position, by filing their revised tax return or otherwise. IT department have accented my IT return as originally filed showing the amounts as cash withdrawals.

Thanks for the responses.