The Central Board of Direct Taxes (CBDT) vide press release dated July12,2020 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 lakhs in case of a non-filer of the income-tax return and
- Above Rs. 1 Crore in case of a filer of the income-tax return
This functionality is 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.
In order to discourage cash transactions, curb black money and move towards less cash economy, the Finance (No.2) Act, 2019 has inserted Section 194N in the Income Tax Act, 1961 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 in the previous financial year.
To avail this facility, the following steps can be followed:
1. Open the official website of Income Tax, i.e. https://www.incometaxindiaefiling.gov.in/home
2. Under the “Quick links” column, click on the facility “Verification of applicability u/s 194N” and the following dialog box will appear.
3. In the above dialog box, enter the PAN and Mobile Number and click continue.
4. You will get the final result.
Section 194N is expected to provide momentum to the buoyancy in direct taxes through widening of the tax base, and hence, promoting less cash economy.
In conclusion, the CBDT has introduced a utility to help banks and post offices determine the applicable TDS rates on cash withdrawals above Rs. 20 lakhs for non-filers and above Rs. 1 crore for filers. This step aims to discourage cash transactions and promote a less-cash economy.
"Ensure TDS compliance for cash withdrawals! Discover the new functionality for banks and post offices. Verify applicability under Section 194N now!" for more related information, contact us at firstname.lastname@example.org
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