TDS ON PAYMENTS MADE IN CASH BY BANKS, POST OFFICES ETC.

TDS is to be deducted by the following persons in respect of payments of cash to any person :

1.Any Banking Company

2. Any Post Office

3.Any Co-operative Society doing Banking Business

Limit of Cash payments above which TDS is applicable :

When any of the above persons makes cash payments (i.e. any person withdraws cash from the bank, post office or Co-operative Society (banking business) of a sum greater than Rs. 1 Crore during a financial year, TDS is required to be deducted @ 2% of the total amount.

However, if the recipient is a person who has not filed his Income tax return for last three Asstt, yr. preceeding the year in which cash withdrawals are done, the TDS is applicable as under :

(a) If the amount withdrawn in cash is greater than 20 lakhs and up to 1 Crore, TDS is to be deducted @ 5% of the total amount.

(b) If the amount withdrawn in cash is greater than Rs.1 crore, TDS has to be deducted @ 5% of the total amount.

Provisions not to apply to the following persons -

(a) Government

(b) Any banking company

(c) any business correspondent of a banking company or co-operative society engaged in carrying on the business of banking, in accordance with the guidelines issued in this regard by the Reserve Bank of India under the Reserve Bank of India Act, 1934 (2 of 1934);

(d) any white label automated teller machine operator of a banking company or co-operative society engaged in carrying on the business of banking, in accordance with the authorisation issued by the Reserve Bank of India under the Payment and Settlement Systems Act, 2007 (51 of 2007):

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