The Central Board of Indirect Taxes in a press release dated 30th August 2019 has clarified that as per the TDS provision introduced in Finance (2) Act of 2019, any cash withdrawal prior to 1st September, 2019 will not be subjected to TDS.
Under the newly introduced Section 194N, TDS (tax deducted at source), 2 per cent tax is levied on cash withdrawals exceeding Rs 1 crore in a year, by a banking company or cooperative bank or post office.
CBDT received queries from the general public regarding the applicability of this section on cash withdrawals exceeding Rs 1 crore, between April 1, 2019 and August 31, 2019. To dispel the concerns of the people, CBDT has issued this clarification that section 194N will come into effect from September 1, 2019. Hence, any cash withdrawal prior to 1st September, 2019 will not be subjected to the TDS under section 194N of the I-T Act.
However, calculation of amount of cash withdrawal for triggering deduction under section 194N of the Act shall be counted from 1st April, 2019. Hence, if a person has already withdrawn Rs 1 crore or more in cash up to 31st August, 2019 from one or more accounts maintained with a banking company or a cooperative bank or a post office, the 2 per cent TDS will apply to all subsequent cash withdrawals.
Click here to read the notification.
