TDS deduction on cash withdrawals above Rs. 20 lakh
The Department of Posts has issued new rules for deduction of TDS if the aggregate withdrawal from all post office schemes is more than Rs 20 lakh.
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New Delhi: The Department of Posts has issued new rules for deduction of TDS if the aggregate withdrawal from all post office schemes is more than Rs 20 lakh. The provision includes withdrawals from PPF also. As per the new provisions under Section 194N of Income Tax Act 1961, if an investor has not filed income tax returns (ITR) for the previous three assessment years then tax deducted at source (TDS) will be deducted from the withdrawal amount.
The new rule is applicable from July 1, 2020. As per the provisions, if aggregate cash withdrawal by an investor exceeds Rs 20 lakh but does not exceed Rs one crore during a financial year and he is a non-ITR filer, then TDS at the rate of two per cent will be deducted from the amount exceeding Rs 20 lakh.
In case total cash withdrawal from all post office accounts exceeds Rs one crore in one financial year then TDS at five per cent will be payable on the amount exceeding Rs one crore. If you are an ITR filer and cash withdrawal exceeds Rs one crore by an ITR filer in a financial year the income tax payable will be two per cent of the amount above Rs one crore.
