I-T dept’s utility helps banks, post offices ascertain TDS rates on cash withdrawals

The Income Tax Department on Sunday notified facilitating a brand new performance for banks and put up workplaces to assist them verify the applicability charges of Tax Deducted on Source (TDS) on money withdrawal of above Rs 20 lakh in case of a one who hasn’t filed earnings tax return and that of above Rs 1 crore in case earnings tax return has been filed.

Under this facility, the financial institution or put up workplace will now solely need to enter the PAN of the one who is withdrawing money for ascertaining the relevant fee of TDS. On coming into PAN, a message might be immediately displayed on the departmental utility: “TDS is deductible at the rate of 2% if cash withdrawal exceeds Rs. 1 crore” [if the person withdrawing cash is a filer of the income-tax return] and “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” [if the person withdrawing cash is a non-filer of the income-tax return]”, based on the notification issued by Central Board of Direct Taxes (CBDT).

CBDT stated that this performance obtainable as “Verification of applicability u/s 194N” on the earnings tax division web site www.incometaxindiaefiling.gov.in since 1st July 2020, can also be obtainable to the banks via web-services in order that all the course of will be automated and be linked to the financial institution’s inside core banking answer.

Data on money withdrawal has proven that enormous quantities of money is being withdrawn by individuals who have by no means filed earnings tax returns. Therefore, to discourage money transactions, maintain monitor of money withdrawals by non-filers, enhance tax compliance and curb black cash, the federal government modified TDS guidelines for making money withdrawals from banks and put up workplaces from this month.

As per the amended Income Tax Act, which got here into impact from July 1, 2020, the edge of money withdrawal has been additional lowered to Rs 20 lakh for the applicability of this TDS for the non-filers and likewise mandated TDS on the larger fee of 5% on money withdrawal exceeding Rs. 1 crore by the non-filers.

The CBDT observe stated that up to now, greater than 53,000 verification requests have been executed efficiently on the brand new facility supplied to banks and put up workplaces by the earnings tax division.