{"id":5662,"date":"2023-05-02T13:46:32","date_gmt":"2023-05-02T13:46:32","guid":{"rendered":"https:\/\/www.caindelhiindia.com\/blog\/?p=5662"},"modified":"2024-12-01T08:36:03","modified_gmt":"2024-12-01T08:36:03","slug":"section-194n","status":"publish","type":"post","link":"https:\/\/www.caindelhiindia.com\/blog\/section-194n\/","title":{"rendered":"Overview of Section 194N- TDS on cash withdrawals"},"content":{"rendered":"<h2><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-5663\" src=\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2023\/05\/TDS-ON-CASH-WITHDRAWLS-\u2013-SECTION-194-N.jpg\" alt=\"TDS ON CASH WITHDRAWLS \u2013 SECTION 194 N\" width=\"1200\" height=\"630\" srcset=\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2023\/05\/TDS-ON-CASH-WITHDRAWLS-\u2013-SECTION-194-N.jpg 1200w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2023\/05\/TDS-ON-CASH-WITHDRAWLS-\u2013-SECTION-194-N-300x158.jpg 300w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2023\/05\/TDS-ON-CASH-WITHDRAWLS-\u2013-SECTION-194-N-1024x538.jpg 1024w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2023\/05\/TDS-ON-CASH-WITHDRAWLS-\u2013-SECTION-194-N-768x403.jpg 768w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2023\/05\/TDS-ON-CASH-WITHDRAWLS-\u2013-SECTION-194-N-800x420.jpg 800w\" sizes=\"(max-width: 1200px) 100vw, 1200px\" \/><\/h2>\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_58 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-69dcf1ea1d219\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-69dcf1ea1d219\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.caindelhiindia.com\/blog\/section-194n\/#Overview_of_Section_194N-_TDS_on_cash_withdrawals\" title=\"Overview of Section 194N- TDS on cash withdrawals\">Overview of Section 194N- TDS on cash withdrawals<\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.caindelhiindia.com\/blog\/section-194n\/#Section_194N-_TDS_Threshold_limit\" title=\"Section 194N- TDS Threshold limit:\">Section 194N- TDS Threshold limit:<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.caindelhiindia.com\/blog\/section-194n\/#FAQs_on_TDS_on_Cash_Withdrawal_Under_Section_194N\" title=\"FAQs on TDS on Cash Withdrawal Under Section 194N \">FAQs on TDS on Cash Withdrawal Under Section 194N <\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.caindelhiindia.com\/blog\/section-194n\/#What_is_Tax_deduction_at_source_on_cash_withdrawal_under_section_194N_about\" title=\"What is Tax deduction at source on cash withdrawal under section 194N about?\">What is Tax deduction at source on cash withdrawal under section 194N about?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.caindelhiindia.com\/blog\/section-194n\/#What_are_the_Income_tax_Exceptions_to_section_194_N\" title=\"What are the Income tax Exceptions to section 194 N ?\u00a0\">What are the Income tax Exceptions to section 194 N ?\u00a0<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.caindelhiindia.com\/blog\/section-194n\/#Who_deducts_Tax_deduction_at_source_on_cash_withdrawal_us_194N_of_the_income_Tax_Act\" title=\"Who deducts Tax deduction at source on cash withdrawal u\/s 194N of the income Tax Act?\">Who deducts Tax deduction at source on cash withdrawal u\/s 194N of the income Tax Act?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/www.caindelhiindia.com\/blog\/section-194n\/#At_what_rate_is_Tax_deduction_at_source_on_cash_withdrawal_Under_Section_194N_deducted\" title=\"At what rate is Tax deduction at source on cash withdrawal Under Section 194N deducted?\">At what rate is Tax deduction at source on cash withdrawal Under Section 194N deducted?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/www.caindelhiindia.com\/blog\/section-194n\/#From_when_is_Tax_deduction_at_source_on_cash_withdrawal_under_section_194N_of_the_income_tax_Act_applicable\" title=\"From when is Tax deduction at source on cash withdrawal under section 194N of the income tax Act applicable?\u00a0\">From when is Tax deduction at source on cash withdrawal under section 194N of the income tax Act applicable?\u00a0<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/www.caindelhiindia.com\/blog\/section-194n\/#To_whom_is_Tax_deduction_at_source_on_cash_withdrawal_Under_Section_194N_of_the_Income_tax_Act_not_applicable\" title=\"To whom is Tax deduction at source on cash withdrawal Under Section 194N of the Income tax Act not applicable?\">To whom is Tax deduction at source on cash withdrawal Under Section 194N of the Income tax Act not applicable?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/www.caindelhiindia.com\/blog\/section-194n\/#Income_Tax_exemption_for_approved_Foreign_Representatives_and_Diplomats_from_section_194N\" title=\"Income Tax exemption for approved Foreign Representatives and Diplomats from section 194N\">Income Tax exemption for approved Foreign Representatives and Diplomats from section 194N<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2><span class=\"ez-toc-section\" id=\"Overview_of_Section_194N-_TDS_on_cash_withdrawals\"><\/span><span style=\"color: #000080;\"><strong>Overview of Section 194N- TDS on cash withdrawals<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The objective of introducing Section 194 N is to discourage cash transactions in the country and promote the digital economy. Section 194N &#8211; TDS on cash withdrawals over and above Rs 1 crore&#8217; has been implemented via the Finance Bill, 2019. But Finance Bill 2020 amends this by lowering the limit to INR 20,00,000\/- if a few conditions are satisfaction, which will be discussed later.<\/p>\n<ul>\n<li>Tax deduction at source Under Section 194N is applicable on cash withdrawals made by any person from bank, Cooperative society bank, post office .<\/li>\n<li>Where Post offices (payer of Tax deduction at source), Cooperative society bank, Nationalized Bank required to deduct Tax deduction at source at specified % and required to pay the balance amount withdrawn to respective individuals<\/li>\n<li>Tax deduction at source is to be deducted only at the time of payment.<\/li>\n<li>Rate of Tax deduction at source : Normally its 2%<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Section_194N-_TDS_Threshold_limit\"><\/span><span style=\"color: #000080;\"><strong>Section 194N- TDS Threshold limit:<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>No Tax deduction at source, if cash withdraw is upto 1 crore in a Previous Year. If cash withdrawal is more than 1 Cr then Tax deduction at source @ 2% only on amount in more than of 1 Cr.<\/li>\n<\/ul>\n<p>In case payee has not filed their income tax return for last 3 Previous Year for which due date under section 139(1) \u00a0already expired before starting of current Previous Year then Tax deduction at source shall be deducted as under :<\/p>\n<ul>\n<li>2 percentage on cash withdrawals in excess of INR 20,00,000\/- upto INR 1,00,00,000\/- Cr &amp;<\/li>\n<li>5 percentage on cash withdrawals in excess of INR 1,00,00,000\/-<\/li>\n<\/ul>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-5664\" src=\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2023\/05\/Section-194N-TDS-on-cash-withdrawals.-.jpg\" alt=\"Section 194N- TDS on cash withdrawals.\" width=\"988\" height=\"494\" srcset=\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2023\/05\/Section-194N-TDS-on-cash-withdrawals.-.jpg 600w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2023\/05\/Section-194N-TDS-on-cash-withdrawals.--300x150.jpg 300w\" sizes=\"(max-width: 988px) 100vw, 988px\" \/><\/p>\n<h2><span class=\"ez-toc-section\" id=\"FAQs_on_TDS_on_Cash_Withdrawal_Under_Section_194N\"><\/span><span style=\"color: #000080;\"><strong>FAQs on TDS on Cash Withdrawal Under Section 194N <\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<h3><span class=\"ez-toc-section\" id=\"What_is_Tax_deduction_at_source_on_cash_withdrawal_under_section_194N_about\"><\/span><span style=\"color: #000080;\"><strong>What is Tax deduction at source on cash withdrawal under section 194N about?<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>As per the section 194N, Tax deduction at source has to be deducted if a sum or total sum withdrawn in cash in a particular Financial Year More than:<\/p>\n<ul>\n<li>INR 20 lakh (if no Tax return has been filed for all the 3 Last Assessment Year\u2019s), or<\/li>\n<li>INR 1 crore (if Income tax return have been filed for all or any one of three previous Assessment Year\u2019s)<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"What_are_the_Income_tax_Exceptions_to_section_194_N\"><\/span><span style=\"color: #000080;\"><strong>What are the Income tax Exceptions to section 194 N ?\u00a0<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"color: #000080;\"><strong>No Tax deduction at source will be deducted in case cash withdrawal by<\/strong>:<\/span><\/p>\n<ul>\n<li>Central &amp; State Govt.<\/li>\n<li>Post offices (payer of Tax deduction at source), Cooperative society Bank, Nationalized Bank and their business correspondent,<\/li>\n<li>White label ATM operator of banks or Cooperative society Bank<\/li>\n<li>Money changer, Authorised dealer, their franchise agent and sub agent in respect of withdrawal made for purchasing foreign currency from Nonresident or foreign tourist visiting India or resident Indians on their return to India or for disbursement of inward remittances to recipient beneficiaries in India in cash under Money Transfer Service scheme.<\/li>\n<li>Registered commission agent \/ trade operating under Agriculture Produce Market Committee for making payment to farmers.<\/li>\n<li>Cash Replenishment Agencies<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Who_deducts_Tax_deduction_at_source_on_cash_withdrawal_us_194N_of_the_income_Tax_Act\"><\/span><span style=\"color: #000080;\"><strong>Who deducts Tax deduction at source on cash withdrawal u\/s 194N of the income Tax Act?<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>Tax deduction at source is deducted by banks (public, private &amp; co-operative) or post offices. The tax is deducted when making any cash payment to any person in more than INR 20 lakh or INR 1,00,00,000\/- (As applicable case) from account maintained with such post offices or banks.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"At_what_rate_is_Tax_deduction_at_source_on_cash_withdrawal_Under_Section_194N_deducted\"><\/span><span style=\"color: #000080;\"><strong>At what rate is Tax deduction at source on cash withdrawal Under Section 194N deducted?<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>Tax deduction at source will be deducted at a rate of 2% on cash withdrawals in excess of INR 1 crore if the person withdrawing the cash has filed income tax return for any or all 3 Last Assessment Year\u2019s.<\/li>\n<li>Tax deduction at source will be deducted at 2% on cash withdrawals of more than INR 20 lakh &amp; 5 percentage for withdrawals exceeding INR 1 Crore if the person withdrawing the cash has not filed Income tax return for any of the last 3 Assessment Year\u2019s.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"From_when_is_Tax_deduction_at_source_on_cash_withdrawal_under_section_194N_of_the_income_tax_Act_applicable\"><\/span><span style=\"color: #000080;\"><strong>From when is Tax deduction at source on cash withdrawal under section 194N of the income tax Act applicable?\u00a0<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>Tax deduction at source on cash withdrawal under section 194N of the income tax Act is applicable starting 1st Sept 2019, or Financial Year 2019-2020.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"To_whom_is_Tax_deduction_at_source_on_cash_withdrawal_Under_Section_194N_of_the_Income_tax_Act_not_applicable\"><\/span><span style=\"color: #000080;\"><strong>To whom is Tax deduction at source on cash withdrawal Under Section 194N of the Income tax Act not applicable?<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Tax deduction at source on cash withdrawal under section 194N of Income tax act will not applicable to withdrawals made by the below persons:<\/p>\n<ul>\n<li>Any cooperative bank<\/li>\n<li>Post office<\/li>\n<li>Central or state Govt<\/li>\n<li>Authorized dealers &amp; related franchise agent &amp; sub-agent along with Money Changer licensed by RBI and its franchise agents<\/li>\n<li>Central govt Specified commission agents or traders operating under Agriculture Produce Market Committee for making payment to the farmers on account of purchase of agriculture produce.<\/li>\n<li>Private or public sector bank<\/li>\n<li>White label ATM operator of any bank<\/li>\n<li>Business correspondent of any bank<\/li>\n<li>Any other person notified by the Government in consultation with RBI.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Income_Tax_exemption_for_approved_Foreign_Representatives_and_Diplomats_from_section_194N\"><\/span><a href=\"https:\/\/carajput.com\/archives\/income-tax-exemption-for-approved-foreign-representatives-and.pdf\"><span style=\"color: #000080;\">Income Tax exemption for approved Foreign Representatives and Diplomats from section 194N<\/span><\/a><span class=\"ez-toc-section-end\"><\/span><\/h3>\n","protected":false},"excerpt":{"rendered":"<p>Overview of Section 194N- TDS on cash withdrawals The objective of introducing Section 194 N is to discourage cash transactions in the country and promote the digital economy. Section 194N &#8211; TDS on cash withdrawals over and above Rs 1 crore&#8217; has been implemented via the Finance Bill, 2019. But Finance Bill 2020 amends this &hellip;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mi_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[1],"tags":[],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/posts\/5662"}],"collection":[{"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/comments?post=5662"}],"version-history":[{"count":3,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/posts\/5662\/revisions"}],"predecessor-version":[{"id":8215,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/posts\/5662\/revisions\/8215"}],"wp:attachment":[{"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/media?parent=5662"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/categories?post=5662"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/tags?post=5662"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}