🔊 The new rules concerning TDS (tax deducted at source) on cash withdrawals came into force from this month, the tax department has made it easier for banks and other financial institutions to try to to the calculation. A functionality to calculate TDS rate under Section 194N has been enabled in tax department's e-filing portal for banks,co-operative society & post office.
👉 The service is, however, meant just for official use by banks, co-operative societies and post offices. Under the 'Quick Links' section on the e-filing portal, a replacement sub-section called 'Verification of applicability u/s 194N' has been inserted.
👉 To verify the applicability of TDS rate, one can attend the link and provides his or her PAN (Permanent Account Number) and mobile number where an OTP are going to be shared. Banks and other financial institutions can use the power to calculate the TDS rate applicable in your case.
👉 Otherwise, you'll be asked to sign a declaration letter along side a replica of acknowledgment of return of Income (ITR-V) of FY 2018-19, FY 2017-18 and FY 2016-17 for verification purposes.
👉 To discourage cash transactions and move towards a less-cash economy, a replacement section 194N was introduced within the tax Act. Under the rule, TDS at the speed of twenty-two is charged on cash payments of quite ₹1 crore in aggregate made during a year by a depository financial institution or cooperative bank or post office to a person from an account maintained by the recipient. With effect from 1st of July this year, the rule has been amended further to link TDS with the filing of tax return (ITR)
.
👉 If you've got not filed your ITR for the last three years, banks will charge you TDS of twenty-two on cash withdrawal in more than ₹20 lakhs to ₹1 crore. the speed goes up to five if the quantity is above ₹1 crore. For those that are filing ITR regularly for the last three years, there's no TDS for cash withdrawals of upto ₹1 crore and a couple of for above ₹1 crore. (Source)
