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Withdrawing cash and not filing ITR? Now pay TDS on cash withdrawals above Rs 20 lakh

Withdrawing cash and not filing ITR? Now pay TDS on cash withdrawals above Rs 20 lakh

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 withdrawals above Rs 20 lakh in case of a non-filer and above Rs 1 crore in case of a filer of the income tax return (ITR). So far, more than 53,000 verification requests have been executed successfully on this facility.

CBDT today said that this functionality available as “Verification of applicability u/s 194N” in since 1st July 2020 is also made available to the banks through web-services so that the entire process can be automated and be linked to the banks’ internal core banking solution.

Explaining the details of this facility, CBDT said that now banks/post offices have to only enter the PAN of the person who is withdrawing cash for ascertaining the applicable rate of TDS. On entering PAN, a message will be instantly displayed on the departmental utility: “TDS is deductible at the rate of 2% if cash withdrawal exceeds Rs 1 crore” (if the person withdrawing cash is a filer of the income-tax return) and “TDS is deductible at the rate 2% if cash withdrawal exceeds Rs 20 lakh and at the rate of 5% if it exceeds Rs 1 Crore” (if the person withdrawing cash is a non-filer of ITR).

CBDT said that the data on cash withdrawal indicated that a huge amount of cash is being withdrawn by the persons who have never filed ITRs.

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