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CBDT provides utility for TDS rates on cash withdrawals
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SME Times News Bureau | 13 Jul, 2020
The Income Tax Department has
facilitated a new functionality for banks and post offices to ascertain
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.
In a statement, the
Central Board of Direct Taxes (CBDT) said that now banks and post
offices have to only enter the PAN of the person who is withdrawing cash
for ascertaining the applicable rate of TDS.
So far, more than 53,000 verification requests have been executed successfully on this facility, a statement by the CBDT said.
"CBDT
today said that this functionality available as 'Verification of
applicability u/s 194N' on www.incometaxindiaefiling.gov.in since 1st
July 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," it said.
On entering PAN by the
bank or the post office, 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", in case the person withdrawing cash
is a filer of the income-tax return.
In case the person
withdrawing cash is a non-filer of income tax return, the message shown
would be: "TDS is deductible at the rate of 2 per cent if cash
withdrawal exceeds Rs 20 lakh and at the rate of 5 per cent if it
exceeds Rs 1 crore."
The CBDT said that the data on cash
withdrawal indicated that huge amount of cash is withdrawn by the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 with effect
from July 1, 2020 further amended IT 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.
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