Bank Transaction Limit: Attention Bank Customers! Tax will have to be paid on withdrawing money from bank account, know how much amount can be withdrawn

Bank Transaction: If you are sure of withdrawing the money lying in your bank account at any time. So wait a little. You will again have to plan your withdrawal carefully so that you can avoid paying unnecessary taxes. For this you should know how much amount can be withdrawn in a year without paying tax. The rule of paying fees for withdrawing money beyond the prescribed limit not only applies to ATM transactions, but the same rule applies to withdrawing money from the bank as well.

How much cash can be withdrawn

People feel that they can withdraw as much cash as they want from their bank account for free. But, under Section 194N of the Income Tax Act, if a person withdraws more than Rs 20 lakh in a financial year, he will have to pay TDS. However, this rule is only for those people who have not filed Income Tax Return (ITR) for 3 consecutive years. Such people will have to pay TDS if they withdraw more than Rs 20 lakh from any bank, cooperative or post office.

Relief to those filing income tax returns

However, under this rule, those filing ITR get more relief. Such customers can withdraw cash up to Rs 1 crore from bank, post office or co-operative bank account in a financial year without paying TDS.

How much TDS will have to be paid?

Under this rule, if you withdraw more than Rs 1 crore from your bank account, TDS will be deducted at the rate of 2 percent. If you have not filed ITR continuously for the last three years, then you will have to pay 2 percent TDS on cash withdrawal of more than Rs 20 lakh and 5 percent TDS on withdrawal of more than Rs 1 crore.

ATM transaction is already charged

Banks charge a fee for withdrawing more money than the prescribed limit from ATM. RBI had increased the service charge for withdrawing cash from ATM from January 1, 2022. Now banks are charging Rs 21 for transactions exceeding the prescribed limit. Earlier one had to pay Rs 20 for this. Most banks offer five free transactions every month from their ATMs. Apart from this, three transactions are also free from ATMs of other banks. However, in metro cities, you can withdraw money from your own bank only three times for free.