I-T dept makes new utility for banks, POs to check TDS rate on high value cash withdrawals
Explaining the details of this facility, the Central Board of Direct Taxes (CBDT) said that now the bank/post office has to only enter the PAN of the person who is withdrawing cash for ascertaining the applicable rate of TDS.
On entering PAN, a message will be instantly displayed on the departmental utility -- "TDS is deductible at the rate of 2 per cent if cash withdrawal exceeds Rs 1 crore" (if the person withdrawing cash is a filer of ITR) and "TDS is deductible at the rate 2 per cent if cash withdrawal exceeds Rs 20 lakh and at the rate of 5 per cent if it exceeds Rs 1 Crore" (in case of non-filers)."The Income Tax Department has facilitated a new functionality for Banks and Post offices through which they can ascertain the TDS applicability rates on cash withdrawal of above Rs 20 lakh in case of a non-filer of the income-tax return and that of above Rs 1 Crore in case of a filer of the income-tax return.
The functionality available as "Verification of applicability u/s 194N" on www.incometaxindiaefiling.gov.in since July 1, 2020, is also made available to the banks through web-services so that the entire process can be automated and be linked to the Bank's internal core banking solution.The CBDT said that the data on cash withdrawal indicated that huge amount of cash is being withdrawn by the persons who have never filed income-tax returns.
To ensure filing of return by these persons and to keep track on cash withdrawals by the non-filers, and to curb black money, the Finance Act, 2020 w e f July 1, 2020 further amended Income-tax Act to lower threshold of cash withdrawal to Rs 20 lakh for the applicability of this TDS for the non-filers and also mandated TDS at the higher rate of 5 per cent on cash withdrawal exceeding Rs 1 crore by the non-filers.In order to discourage cash transactions and move towards less cash economy, the Finance Act, 2019 had inserted section 194N in the Income Tax Act with effect from September 1, 2019, to provide for levy of TDS @ 2 per cent on cash withdrawal exceeding Rs 1 crore from a Bank/Post Office account/s subject to certain exceptions. JD BAL BAL
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