You will have to pay 20% TDS for withdrawing this much cash from the bank, otherwise action will be taken

Income Tax: If you are withdrawing cash from the bank, be careful. 2% TDS will be deducted if you withdraw Rs 20 lakh or more from the bank in a year. This rule will apply to those who have not filed income tax returns in the last three years.

2% TDS will be deducted

From September 1, 2019, the Income Tax Department had issued a rule, which said that if a person withdraws one crore rupees or more in cash from one or more of his bank accounts in a financial year, the bank will deduct two percent TDS. Tax consultants said that this provision has been implemented to promote digital transactions. The new rule has come into effect from July 1. If cash from Rs 20 lakh to one crore is withdrawn from the bank, it will be investigated. If the income tax return is not filed, then two percent TDS will be deducted. The Income Tax Department can also investigate how such a large amount came into the account.

TDS will be deducted up to 5%

5% TDS will be deducted on withdrawing more than one crore rupees in cash. This rule is already in place that if TDS has been deducted for a person and he does not have a PAN, then the rate of TDS will be 20%.

The rule will apply to these people

Individual Hindu Undivided Family, Partnership entity, Limited Liability, Partnership firm, Individual company organization, Local body.

These are exempted from

Government institutions, banks, post offices, cooperative societies are working like banks.

Also know this

For the last three years, TDS is being deducted on cash withdrawal of more than Rs 20 lakh under section 194. This tax will have to be paid in case of non-filing of tax return.

what should you do

First of all, you have to submit the details of your PAN card in the bank. If you have already given the details of your PAN card, then there is no need to give it again. You have to give the details of your income tax return to the bank. By doing this, you can save TDS on withdrawals of more than Rs 20 lakh.

This is TDS

If the amount deducted after deducting tax from the income is given to the person, then the amount deducted as tax is called TDS. The government collects tax through TDS. It is deducted on sources like salary, interest received on any investment or commission etc.

Bank account holders who are filing returns will have to pay 2 per cent TDS on cash withdrawal of Rs 1 crore or more. Those who have not filed returns will have to pay 2% tax on withdrawal of Rs 20 lakh. Banks have updated the software.