Gov ernmentofIndia

Ministr
yofFinance
DepartmentofRev enue
Cent
ralBoardofDi r
ectTaxes

NewDel
hi,
30t
hAugust
,2019

PRESSRELEASE

Cl
ari
fi
cat
iononappl
i
cabi
l
ityofTaxDeduct
ionatSour
ceoncashwi
thdr
awal
s
In ordert o di
scourage cash t r
ansactions and mov etowards l
ess cash
economy ,theFi nance( No.2)Act ,2019hasi nsertedanew sect i
on194N i nthe
Income-taxAct ,1961(the‘Act’
),t
opr ovi
def orlevyoft axdeducti
onatsource(TDS)
@2%oncashpay mentsinexcessofonecr orer upeesinaggregatemadedur i
ngthe
year,byabanki ngcompanyorcooper ati
vebankorpostof f
ice,t
oanypersonf r
om
oneormor eaccount smai ntai
nedwi thitbyt her ecipi
ent
.Theabov esectionshal
l
comei ntoeffectfrom 1stSeptember,2019.
Si
ncethesectionprovi
dedthatthepersonresponsibleforpayi
nganysum, or
,
asthecasemaybe, aggregat
eofsums, i
ncash,inexcessofonecr orerupeesdur
ing
theprevi
ousy eartodeductincomet ax@2%oncashpay menti nexcessofrupees
onecrore,queri
eswer er
eceivedfr
om thegeneralpubl
icthroughsocialmediaonthe
appl
icabil
i
tyofthissecti
ononwi t
hdrawalofcashfrom 01.04.2019to31.08.
2019.
TheCBDT, havingconsider edtheconcer nsofthepeopl e,herebyclar
ifi
esthat
secti
on194Ni nsertedintheAct ,istocomei ntoeff
ectfrom 1stSept ember,2019.
Hence, anycashwi thdrawalpri
ort o1stSeptember,2019wi llnotbesubj ect
edt othe
TDSundersect i
on194Noft heAct .Howev er,si
ncethethr esholdofRs.1cr oreis
withrespectt ot hepr evi
ousy ear ,calcul
ationofamountofcashwi t
hdrawalfor
tr
igger
ingdeduct i
onundersect ion194Noft heActshallbecount edfrom 1stApr i
l
,
2019.Hence, ifaper sonhasal readywi thdr
awnRs.1cr or
eormor eincashupt o31st
August,2019f rom oneormor eaccount smai ntai
nedwithabanki ngcompanyora
cooperativebankorapostof fi
ce, thetwopercentTDSshal lapplyonal lsubsequent
cashwi thdrawals.

(
Sur abhiAhluwali
a)
Commi ssionerofIncomeTax
(Media&Techni calPoli
cy)
Off
ici
alSpokesper son,CBDT.