The tax division has been gathering knowledge from a number of sources with a view to observe down these people who find themselves making an attempt to keep away from being taxed and are usually not submitting revenue tax returns (ITR). To obtain the identical goal, the federal government introduced in a brand new regulation final yr within the month of July beneath the Income Tax Act. As per the Section 194N of the Income Tax Act if an individual is withdrawing money from small financial savings schemes together with public provident fund (PPF), put up workplace deposits, recurring deposit, nationwide financial savings certificates, she or he is liable to pay TDS (tax deducted at supply) on the fee of 2-5% if that particular person has not filed ITR within the earlier 3 years.
“Where an individual withdraws greater than ₹20 lakh from all put up workplace schemes together with PPF, TDS can be withheld u/s 194N at 2% of combination quantity if quantity exceeds ₹20 lakhs however doesn’t exceed ₹1 crore; or 5% of combination quantity if quantity exceeds ₹1 crore if the particular person has not filed revenue tax returns (ITR) for the earlier three evaluation years,” mentioned Amit Maheshwari, tax companion, AKM Global, a tax and consulting agency.
The charges and limits rely on whether or not the particular person withdrawing money has filed ITR or not in three previous evaluation years for which era restrict to file ITR has expired.
“If you’ve gotten filed ITR for any certainly one of such 3 evaluation years, then the TDS just isn’t there for withdrawals upto ₹ 1 crore in a yr and for money withdrawals exceeding Rs. 1 crore, TDS fee is 2%,” mentioned Sujit Bangar, Founder Taxbuddy.com.
These TDS guidelines are relevant on money withdrawal from banks, co-operative banks in addition to put up workplaces.
The tax division has launched a utility utilizing which banks and put up workplaces can confirm if an individual has filed ITR or not.
You can’t keep away from this TDS even by submitting Form 15H/G, a declaration that your revenue is under the exempted restrict.
“No choice on this case, TDS shall be deducted in all instances of money withdrawal above the ceiling of ₹20 lakhs or ₹1 crore whichever is relevant. Section 194N just isn’t eligible for 15G/15H declaration or decrease TDS deduction certificates beneath Section 197,” mentioned Tarun Kumar, a Delhi-based chartered accountant.
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