Cash Withdrawal Tax

As per the provisions of the Income Tax Act, Banks are required to deduct TDS @ 2% from the aggregate cash withdrawals exceeding INR 1 Crore made during a Financial Year, from one or more accounts, maintained by a customer under the same PAN.

As per amendments made in the Section 194N, vide Finance bill, 2020, passed on 21st March 2020, TDS will be deducted as below -

@ 2% from the aggregate cash withdrawals exceeding INR 20 lacs and @ 5% from the aggregate cash withdrawals exceeding INR 1 crore in case the customer has not filed his Income Tax returns for three Assessment Years relevant to 3 Previous Years immediately preceding the previous year in which the payment of the sum is made to him. This amendment is effective from 01st July 2020.

@20% from the aggregate cash withdrawals exceeding INR 20 lacs, in case the PAN number is not updated in the account.

In case you wish to claim exemption from Tax Deduction at Source (TDS) on aggregate cash withdrawals in excess of INR 20 lacs in a Financial Year, you are requested to submit the TDS Exemption form in the format provided in the links given below.

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