November 29, 2020

Earnings Tax Division: I-T dept makes new utility for banks, POs to test TDS charge on excessive worth money withdrawals

Over 53,000 requests for verifying tax deduction at supply (TDS) charges relevant on money withdrawals – of above Rs 20 lakh for taxpayers not submitting earnings tax returns and above Rs 1 crore for these submitting returns – have been processed by the IT division.

The requests have been processed by a brand new performance on the IT web site meant for banks and publish places of work for ascertaining the TDS charges relevant on money withdrawals, the Central Board of Direct Taxes stated Sunday.

CBDT stated that the performance of “Verification of applicability u/s 194N” on the earnings tax web site has been obtainable since July 1, 2020, and has additionally made obtainable to the Banks by web-services in order that the complete course of might be automated and be linked to the financial institution’s inside core banking resolution.

“Banks or publish places of work solely should enter the PAN of the one who is withdrawing money for ascertaining the relevant charge of TDS, which can present an automated prompt message displaying the TDS charge that’s to be deducted,” the Board stated in a press release.

CBDT stated that the information on money withdrawal indicated that massive quantities of money is being withdrawn by the individuals who’ve by no means filed income-tax returns.

To make sure submitting of return by these individuals and to maintain observe on money withdrawals by the non-filers, and to curb black cash, the Finance Act, 2020 had additional amended Earnings-tax Act to decrease threshold of money withdrawal to Rs 20 lakh for the applicability of TDS for the non-filers and in addition mandated TDS on the larger charge of 5% on money withdrawal exceeding Rs 1 crore by the non-filers.

To discourage money transactions and transfer in direction of cashless economic system, the Finance (No.2) Act, 2019 has inserted part 194N within the Earnings Tax Act from September 1, 2019 to offer for levy of TDS at 2% on money withdrawal exceeding Rs 1 crore from a financial institution or publish workplace account, topic to sure exceptions.