Finance & Economy | News & Insights

Income Tax Department assigned POs to check TDS rate on high cash withdrawals

Published: July 13, 2020
Author: munimji

The IT department has processed about 53000 for confirming Tax Deduction at Source rate applicable on the cash withdrawal on above 20 lakh rupees for taxpayers not filing the income tax returns. As a response to the request, the IT department has processed new functionality on its website for banks and post office for a certain in the TDS rate applicable to the cash withdrawals.

“Banks or post offices only have to enter the PAN of the person who is withdrawing cash for ascertaining the applicable rate of TDS, which will show an automatic instant message displaying the TDS rate that is to be deducted,” the Board said in a statement

CBDT said that the functionality of “Verification of applicability u/s 194N” on the income tax website has been available since July 1, 2020, and has 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.

CBDT said that the data on cash withdrawal indicated that huge amounts of cash are being withdrawn by the persons who have never filed income-tax returns.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 had further amended Income-tax Act to lower threshold of cash withdrawal to Rs 20 lakh for the applicability of TDS for the non-filers and also mandated TDS at the higher rate of 5% on cash withdrawal exceeding Rs 1 crore by the non-filers.

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