The Income Tax department has rolled out a new tool to calculate Tax Deducted at Source (TDS) rate under Section 194N on its e-filing portal. This development comes after new rules under Section 194N relating to TDS on cash withdrawals were implemented from July 1.
Section 194N :-
To encourage a cashless economy, a new Section 194N was introduced in the Income Tax Act effective from July 1.
Section 194N is applicable in case of cash withdrawals of more than Rs 1 crore during a financial year. A TDS rate of 2% will apply to the aggregate of sums of more than Rs 1 crore withdrawn from a bank or financial institution by any person from an account maintained by the recipient in a financial year.
Furthermore, this rule has been revised to link TDS with the filing of Income Tax Return (ITR).
If you have not filed your ITR for the last 3 years, your bank will charge you TDS of 2% on cash withdrawal ranging between Rs 20 lakhs to Rs 1 crore. If the amount is above Rs 1 crore a TDS rate of 5% is charged……..Read More>>