Central Board of Direct Taxes (CBDT) has issued a new notification on 4th April 2024. This notification brings a crucial change to how tax deductions are applied on specific withdrawals, especially for individuals. The notification provides that no deduction of tax shall be made under section 194EE of the Act on payment of amount referred to in clause (a) of sub-section (2) of section 80CCA, which is withdrawn by an assessee being an individual.
This new notification effectively removes the obligation for TDS on withdrawals from specific accounts under section 80CCA for individuals. This change can have a significant impact on taxpayers in the following ways:
Improved Cash Flow: Individuals will receive the full amount of their withdrawal without any deduction at source, improving their liquidity.
Simplified Tax Filing: Since TDS won’t be deducted, taxpayers won’t need to worry about reconciling TDS credits while filing their returns.
Reduced Compliance Burden: This move reduces administrative hassles, especially for small investors and retirees who rely on these withdrawals for their income.
The CBDT’s latest notification reflects the government’s continuous effort to make tax administration more taxpayer-friendly. By eliminating TDS on specific withdrawals under section 80CCA, it provides individuals with greater financial flexibility and ease of compliance.
