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. So far, more than 53,000 verification requests have been executed successfully on this facility.
CBDT said that this functionality available 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.
Explaining the details of this facility, 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% if cash withdrawal exceeds Rs. 1 crore [if the person withdrawing cash is a filer of the income-tax return] and TDS is deductible at the rate 2% if cash withdrawal exceeds Rs. 20 lakh and at the rate of 5% if it exceeds Rs. 1 Crore [if the person withdrawing cash is a non-filer of the income-tax return].
CBDT said that the data on cash withdrawal indicated that huge amount of cash is being withdrawn by the persons who have never filed income-tax returns.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. 1st July, 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% on cash withdrawal exceeding Rs. 1 crore by the non-filers.
It may be noted that in order to discourage cash transactions and move towards less cash economy, the Finance (No.2) Act, 2019 has inserted section 194N in the Income Tax Act w.e.f. 1st September, 2019 to provide for levy of TDS @ 2% on cash withdrawal exceeding Rs. 1 crore from a Bank/Post Office account/s subject to certain exceptions.
Powered by Capital Market - Live News
Disclaimer: No Business Standard Journalist was involved in creation of this content
