Daily Current Affairs 2020 Income Tax Department launches tool for Banks to ascertain TDS applicability rates on cash withdrawals | Daily Current Affairs 2020

Income Tax Department launches tool for Banks to ascertain TDS applicability rates on cash withdrawals

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The Income Tax Department has facilitated a new functionality for Banks and Post offices through which they can ascertain the TDS applicability rates on cash withdrawals. Under it, the Banks and Post Offices can ascertain the TDS applicability rates on cash withdrawals  of above 20 lakh rupees in case of a non-filer of the income-tax return and that of above one crore rupees in case of a filer of the income-tax return. Central Board of Direct Taxes (CBDT) said, so far, more than 53 thousand verification requests have been executed successfully on this facility.

Explaining the details of this facility, CBDT said that now the Bank and Post Office has to only enter the PAN of the person who is withdrawing cash for ascertaining the applicable rate of TDS. On entering PAN, a message will be instantly displayed on the departmental utility. It said, TDS is deductible at the rate of 2 per cent  if cash withdrawal exceeds one  crore rupees if the person withdrawing cash is a filer of the income-tax return. It said, TDS is deductible at the rate 2 per cent  if cash withdrawal exceeds  20 lakh rupees and at the rate of 5 per cent  if it exceeds one  crore rupees in case the person is a non-filer of the income-tax return.

CBDT said that the data on cash withdrawal indicated that huge amount of cash is being withdrawn by the persons who have never filed income-tax returns. To ensure filing of return by these persons and to keep track on cash withdrawals by the non-filers, and to curb black money, the Finance Act, 2020 further amended Income-tax Act from 1st of this month to lower threshold of cash withdrawal to 20 lakh ruppes for the applicability of this TDS for the non-filers. It also  mandated TDS at the higher rate of 5 per cent on cash withdrawal exceeding one crore rupees by the non-filers.

Source: News On Air

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