New TDS Rules | Know how much tax will be levied on withdrawing cash from the bank?

 

In order to reduce cash transactions and better implement tax compliance, the tax department has made some changes in the rules of TDS. From July 1, 2020, the new TDS rule will be applicable on the amount withdrawn from the bank and post office. Till now, if someone used to withdraw cash in excess of one crore rupees in a year, then you had to pay 2% TDS (Tax Deducted at Source). But from July 1, 2020, the new TDS rule has come into force. Now the TDS rate for high-value cash transactions of more than Rs 20 lakh in a financial year will depend on whether the investor has filed Income Tax Return (ITR) in the last three years.

 

New TDS rule for those who have filed returns in the last 3 years

 

In the 2019 budget, the government included a new section 194 N in the income tax under which withdrawing more than Rs 1 crore cash from a bank account would have to pay 2% TDS. This new TDS rule will also be applicable to withdraw cash from post office accounts. According to experts, If any consumer withdraws cash of 99 lakh rupees in a financial one year and after that, he withdraws 1.50 lakh rupees more than only 50,000 rupees will have to pay 2% TDS. Whereas, for consumers whose PAN card is not updated in the bank's records, TDS can be levied up to 20% under section 206AA of Income Tax.

 

If the consumer has filed income tax returns in the last three years and deposited PAN, then withdrawing less than 1 crore cash will not attract any TDS. If consumers withdraw cash from the bank, the bank can ask for ITR-V to make sure that you are filing returns. Along with this, you can also ask the bank to check from the e-filing portal of the Income Tax Department.

 

TDS rules for those who do not file ITR returns

 

If the consumer has not filed an income tax return in the last three years, then you may have to deposit huge TDS.

-There will be no TDS for withdrawing cash up to Rs. 20 lakhs.

-From 20 lakh rupees to 1 crore rupees the cash will be charged 2% TDS.

-Withdrawing more than 1 crore cash will incur a TDS of 5%.