Quick Summary
The Income Tax Department has facilitated a new functionality for Banks and Post offices through which they can ascertain the TDS applicability rates on cash withdrawal of above Rs.20 lakh in case of a non-filer of the income-tax return and that of above Rs. 1 Crore in case of a filer of the income-tax return. So far,more than 53,000 verification requests have been executedsuccessfully on this facility. CBDT today said that this functionality available as Verification of applicability u/s 194
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FAQ :
The CBDT has provided a new online utility, available on www.incometaxindiaefiling.gov.in, for banks and post offices to ascertain the TDS applicability rates on cash withdrawals.
For individuals who file income tax returns, TDS is deductible at 2% if cash withdrawal exceeds Rs. 1 crore. For non-filers, TDS is deductible at 2% if cash withdrawal exceeds Rs. 20 lakh and at 5% if it exceeds Rs. 1 crore.
Banks and post offices can simply enter the PAN of the person withdrawing cash into the departmental utility to instantly see the applicable TDS rate.
The facility has been introduced to ensure income tax returns are filed by those withdrawing large amounts of cash, to track cash withdrawals by non-filers, and to curb black money and discourage cash transactions.
The provision for TDS on cash withdrawals exceeding Rs. 1 crore was inserted by the Finance (No.2) Act, 2019, effective from 1st September 2019. Further amendments lowering the threshold for non-filers were effective from 1st July 2020.
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