TDS u/s 194N on Cash Withdrawals

Section 194N relates to TDS deduction in case the cash withdrawals over Rs. 1 Crore in a year. With effect from 01st July 2020, it is provided that in case of a person who has not filed his income tax return for last three assessment years and the time limit to file the return of income u/s 139(1) is expired, then the threshold limit of Rs. 1 crore is reduced to Rs. 20 Lakh and rate of TDS shall be as under :

(a) 2 per cent from Rs. 20 Lakh to Rs. 1 crore, and

(b) 5 per cent above Rs. 1 crore.

In other cases, the threshold limit of Rs. 1 crore and the rate of TDS of 2 per cent on cash withdrawals above Rs. 1 crore shall continue. For further clarification please contact the Branch Manager.

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