TDS on cash withdrawal u/s 194N – FY.2023-2024.
We would like to inform you of the recent changes introduced to ‘TDS on Cash withdrawals’ under Sec 194N of Income Tax Act.
With effect from 1 July 2020, if you have not filed your Income tax returns for last three consecutive years then the following TDS rates will be applicable under Section 194N of Income Tax Act.
- TDS of 2% on Cash withdrawal of INR 1 Crore & above – for customers who have filed their ITRs, for all three Assessment years, relevant to the three previous years.
- TDS of 2% on Cash withdrawal of INR.20 lacs & above and 5% exceeding INR 1 Crore – for customers who have NOT filed their ITRs for all three Assessment years, relevant to the three previous years.
Customers may submit / email the attached declaration at the nearest branch at the earliest, confirming that they have filed their IT returns for the last 3 years.
Vide Income tax rules, the PAN details as mentioned by the customer in the declaration will be validated on Income Tax Portal, and if found “defaulter” , the said declaration will be rejected by the Bank and TDS will be applied at higher rate.
As per Section 139AA of Income Tax Act 1961 and in accordance with the guidelines issued by Central Board of Direct Taxes, it was mandatory to link Aadhaar with PAN by June 30, 2023 failing which the PAN becomes inoperative from 1st July’23. TDS at a higher rate of 20% will be applicable on cash withdrawals for customers with inoperative PANs.
Please review the following table below to understand the TDS rate that will apply on your cumulative cash withdrawals from IndusInd Bank A/C for FY 2023-2024.
| Customers who have not linked their Aadhaar with PAN - ( Inoperative PANs). | TDS rate |
|---|---|
| Less than or equal to INR 20 lacs | No TDS |
| Exceeding INR 20 Lacs | 20% |
| Customers who have filed their ITRs for the last three FYs. | TDS rate |
|---|---|
| Less than or equal to INR 1 Crore | No TDS |
| Exceeding INR 1 Crore | 2% TDS |
| Customers who have NOT filed their ITRs for the last three FYs. | TDS rate |
|---|---|
| Less than or equal to INR 20 lacs | No TDS |
| Exceeding INR 20 lacs up to 1 Crore | 2% TDS on amount > INR 20 lacs |
| Exceeding INR 1 Crore | 5% TDS on amount > INR 1 Crore |
- As per Finance Act 2023 - the threshold limit of cash withdrawal for application of TDS has been increased to INR 3 Crore from existing INR 1 Crore in case the recipient is a co-operative society. The above change is only for co-operative society and NOT for any other type of customers.
For any further assistance or guidance, please call our 24x7 Phone Banking Numbers: 18602677777/ 18002660616/ +91 22 4406 6666 or write to us at tdshelp@indusind.com.