The Income Tax Department on 12th July 2020 has notified that they are facilitating a new functionality for banks and post offices to help them ascertain the applicability rates of Tax Deducted on Source (TDS) on cash withdrawal of above Rs 20 lakh in case of a person who hasn’t filed income tax return and that of above Rs 1 crore in case income tax return has been filed.
The functionality is available as ”Verification of applicability u/s 194N” on www.incometaxindiaefiling.gov.in from 1st July 2020, and 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.
Under this facility the bank or post office will now only have to 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 2% if cash withdrawal exceeds Rs. 20 lakh and at the rate of 5% if it exceeds Rs. 1 Crore for non filers and 2% for those who have filed IT returns.
Click here to read the notification.
