CBDT - Sec. 194N TDS on cash withdrawals applicable from Sept. 1
CBDT gives relief to taxpayers, clarifies that cash withdrawal prior to September 1, 2019 won't be subject to 2% TDS under Sec. 194N ; However, Board adds that for the purpose of calculating the Rs.1 Cr limit for FY 2019-20 , the amount already withdrawn till Aug. 31 will be considered.
Note : In order to discourage cash transactions and move towards less cash economy, the Finance (No. 2) Act, 2019 has inserted a new section 194N to provide for levy of tax deduction at source (TDS) @2% on cash payments in excess of one crore rupees in aggregate made during the year, by a banking company or cooperative bank or post office, to any person from one or more accounts maintained with it by the recipient. The above section shall come into effect from 1st September, 2019.