Question 1

Should we remove cash and submit a TDS claim?

Accepted Answer

When filing your income tax return, you can deduct the TDS on cash withdrawals from the overall tax due return.

Question 2

Are NRIs subject to 194N?

Accepted Answer

Yes, Section 194N applies to money withdrawals made by both citizens and non-residents.

Question 3

Is Trust Covered by 194N?

Accepted Answer

Exempt for rare expressly stated exclusions, all people, including liberal organisations, AOPs, clubs, and trusts, are accountable to Section 194N.

Question 4

What is the TDS Rate for Cash Withdrawals?

Accepted Answer

Any cash withdrawal that amounted to more than ₹20 lakhs or ₹1 crore (depending on the scenario) in the prior year would be subject to TDS deduction at a rate of 2% or 5% (depending on the circumstance) by a bank, cooperative bank, or post office.

Question 5

Who Was Exempt From 194N?

Accepted Answer

The Federal Government, State Governments, and the Banks, Post Offices, and Co-operative Societies engaged in Banking Business, as well as Business Correspondents and White Label ATM Operators ('WLATMO') authorised by the RBI, are free from these restrictions from paying under Section 194N of the Income Tax Act. 11.

Question 6

What is TDS section 194 N?

Accepted Answer

Section 194N of the Income Tax Act, 1961, is a provision that requires a person (called the deductor) to deduct tax at source (TDS) from any sum paid in cash to another person (called the deductee) if the amount or aggregate of amounts paid in cash during the financial year exceeds a certain threshold limit. The threshold limit for cash withdrawal is:

Rs. 1 crore, if the deductee has filed income tax return for any or all three previous assessment years.

Rs. 20 lakh, if the deductee has not filed income tax return for any of the preceding three assessment years.
The rate of TDS under Section 194N is 2%

Question 7

Is TDS 194N refundable?

Accepted Answer

Yes, TDS under Section 194N is refundable. The deductor can claim the TDS as a deduction against their total tax liability in the income tax return filed for the financial year in which the TDS was deducted.

Question 8

How do I claim my 194N TDS?

Accepted Answer

To claim your 194N TDS, you need to file your income tax return for the financial year in which the TDS was deducted. In your income tax return, you will need to enter the amount of TDS deducted under Section 194N in the relevant section. You will also need to provide the PAN of the deductor.

Question 9

How much TDS is charged for cash withdrawal?

Accepted Answer

The amount of TDS charged for cash withdrawal depends on the threshold limit that applies to you. If you have filed an income tax return for any or all three previous assessment years, the TDS rate is 2%. If you have not filed income tax return for any of the preceding three assessment years, the TDS rate is 2% for the first Rs. 20 lakh and 5% for the amount exceeding Rs. 20 lakh.

Section 194N

FAQ's on Section 194N

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