TDS on cash withdrawal: How is there more relief for income tax return filers

TDS on cash withdrawal: How is there more relief for income tax return filers

So what is the limit for those who do not file ITR

In Budget 2020, the threshold limit for TDS on cash withdrawal has been reduced to Rs 20 lakh for non-ITR filers. That is, those who have not filed ITR for 3 consecutive years, if they withdraw cash of more than Rs 20 lakh in 1 financial year by combining all the accounts of any bank / co-operative bank / post office, then they will get 2 percent TDS. have to give. If a non-ITR filer withdraws cash of more than Rs 1 crore within a financial year from all accounts of any one bank / co-operative bank / post office, then he will have to pay TDS at the rate of 5 percent.

If you have multiple accounts in different banks

Keep in mind that the threshold limit of Rs 20 lakh and Rs 1 crore is for cash withdrawals made within 1 financial year inclusive of all accounts of any one bank/co-operative bank/post office. Therefore, those who file ITR, if they have accounts in more than one bank / post office / co-operative bank, then they can do cash transactions of more than 1 crore in a financial year from each bank / post office / co-operative bank without 2% TDS can be made. For example, if someone has three accounts in three different banks, then he can withdraw cash from each bank up to Rs 1 crore i.e. a total of Rs 3 crore in a financial year without tax deduction. Similarly, non-ITR filer Also, every bank / post office / co-operative bank can do cash transactions of more than Rs 20 lakh in a financial year without TDS of 2 percent.

There is no other payment mode other than cash.

A provision of 2 per cent TDS has been made under section 194N on cash withdrawals of more than Rs 20 lakh / Rs 1 crore in a financial year. Make it clear that TDS above this threshold limit will be deducted only on those transactions where cash is withdrawn. If someone has taken payment from the bank by check or draft or digital / electronic mode, then TDS will not be deducted because the payment was not done in cash.

Will the entire amount be taxed if the limit is crossed?

On crossing the threshold limit, tax (TDS) is not deducted on the entire amount including Rs 20 lakh/1 crore. TDS (Tax Deducted at Source) will be applicable only on the amount above Rs 20 lakh/1 crore and not Rs 20 lakh/1 crore if someone transacts in cash above the annual limit of Rs 20 lakh/1 crore from the account Including the full amount.

1 crore limit does not apply to these

Under section 194N, certain categories are exempted from TDS of 2 per cent for cash withdrawal from the account even after crossing the annual limit of Rs 1 crore. These categories include business correspondents of a government entity, bank, co-operative society, post office, banking company or co-operative society, white label ATM operator of a bank and persons notified by the government and RBI.

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