CBDT issues clarification in respect of tax deduction at source on cash withdrawals
Central Board of Direct Taxes (CBDT) has issued Press Release to clarify applicability of Tax Deduction at Source(TDS) on cash withdrawals to be charged by banking company or cooperative banks or post office to any person from one or more accounts maintained with it by the recipient on making cash payment in excess of one crore rupees in aggregate during the year, which shall come into effect from the 1st day of September, 2019.
It has been clarified that cash withdrawal prior to 1st September, 2019 will not be subjected to the TDS. However, since the threshold of Rs. 1 crore is with respect to the previous year, calculation of amount of cash withdrawal for making deduction of TDS under Section 194N of the Income Tax Act, 1961 shall be counted from 1st April, 2019. Hence, if a person has already withdrawn Rs. 1 crore or more in cash upto 31st August, 2019 from one or more accounts maintained with a banking company or a cooperative bank or a post office, two per cent TDS shall apply on all subsequent cash withdrawals from 1st day of September, 2019 onwards.
Source: Central Board of Direct Taxes