In the recent budget 2020 has reduced the threshold limit for TDS on cash withdrawel to Rs 20 lakh for taxpayers who have not filed their income tax returns for past three years. Banks, Co-operative Banks & Post Offices are liable to deduct the TDS on Cash Withdrawal under Section 194N of Income Tax Act, 1961 as per given below rates as per Finance Act, 2020:

Remarks:

• Cash withdrawel amount will be considered from 1st of April 2020.
• This section will not apply on Government, Banking companies, ATM Operators, Co-Operative society involved in Banking business etc.
• TDS will be deducted only on the amount exceeding the above limits.
• Given limit will apply separately for each account.
• ITR for FY 18-19 still can be filed up to 31st July 2020.

Reason for tighten the Section 194N:

• To promote digital economy in the country and discourage cash transactions.
• Expand digital payment network in India.