On Friday, the Revenue Department informed that the 2% tax deduction at source (TDS) on cash withdrawal of over Rs 1 crore within a year will come into effect from Sept 1.
According to an official statement, "If a person has already withdrawn Rs. 1 crore or more in cash up to Aug 31, 2019, from one or more accounts maintained with a banking company or a cooperative bank or a post office, the two per cent TDS shall apply on all subsequent cash withdrawals".
However, it also clarified that any cash withdrawal prior to Sept 1, 2019, will not be subjected to the TDS.
The statement said, "Since the threshold of Rs 1 crore is with respect to the previous year, calculation of the amount of cash withdrawal for triggering deduction under section 194N of the Act shall be counted from April 1, 2019".
The Govt. introduced the tax in order to discourage cash transactions & move towards a cash-less economy.
It further added, "The Finance Act, 2019 has inserted a new section 194N in the Income-tax Act,1961, to provide for levy of tax deduction at source (TDS) at 2 per cent on cash payments in excess of one crore rupees in aggregate made during the year".
Source Link
Picture Source :
