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TDS ON CASH WITHDRAWALS Section no Description Cut off Normal Rate of TDS Reduced Rate From 14 May 2020 to 31 Mar 2021) 194 N TDS on cash withdrawals 1 Crore 2% No Change As Per Section 194N Examples: Payment TDS Applicable/No TDS 9800000 10000000 10050000 NO TDS NO TDS TDS Applicable In which amount 10050000 or 50000 If cash withdrawals exceeding Rs. 1 crore from Banking Company, Cooperative Society engaged in business of banking and Post office. TDS Deducted @ 2% on withdrawals TDS will be deducted on Rs. 50000 Rate not Reduced due to lockdown Example Who is Deductor A Who is Deductee Bank Who will deposit TDS Bank Who will give TDS certificate to whom Bank to A What is TDS Challan Return Forms Applicable? Normal Forms TDS Challan 281 TDS Return Form 26Q TDS Certificate Form 16A Suppose A withdrawals Rs. 110 Lacs from Bank on 28 April Bank will Deduct 2% TDS on 10 Lacs=20000 Bank will Pay 10980000 A Bank Withdrawals 110 Lacs Cash =11000000 10 lacs*2% =10980000 TDS Deposit Section 194N Earlier In All Cases ITR Filed for Any of Last 3 years Now (From 1 Jul 2020) TDS Deducted @ 2% if Amt withdrawn More than 1 Cr ITR Not filed for Any of Last 3 Years TDS Deducted @ 2% if Amt withdrawn More than 1 Cr TDS Deducted @ 5% if Amt withdrawn More than 1 Cr How will Bank Will Get to Know About whether Person has filed ITR? Bank Check Online at ---->Verification of Applicability of 194N Section 194N Example: Question Suppose a person has an account in ICICI Bank. He has already withdrawn Rs. 99 lakh He further withdraws Rs. 1 lakh No TDS to be deducted as cash withdrawals do not exceed Rs 1 crore Question 2 Suppose in above example he further withdraws Rs 150000 TDS is Deducted under Section 194N as cash withdrawals exceeds Rs 1 crore TDS Rate = 2% TDS will be deducted on Rs. 50000 TDS amount Rs. 50000 * 2% = 1000 Net payment received from bank= Rs.150000 1000 = 149000

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CA Maninder Singh

CA Maninder Singh is a Chartered Accountant for the past 12 years. He also provides Accounts Tax GST Training in Delhi, Kerala and online.