According to the latest rule in by the Government, people having cash withdrawal of  Rs 1 crore or more from bank or post office up to 31st August will have to pay 2% TDS (tax deducted at source) and from 1st September, a new provision of tax law implement.
New TDS provision introduced in Finance (2) Act of 2019, the withdrawals made so far this fiscal will count in computing the Rs 1 crore threshold for the levy. The provision imposes TDS on total cash payments above Rs one crore by any banks like cooperative banks or post office to any person from one or more accounts, said Central Board of Direct Taxes (CBDT).
TDS will not be applicable on cash withdrawal before 1st September but it will be counted in computing the threshold for the whole year because new provision comes into effect from 1st September.
The government taking a various step to promote digital payments to establish a trail of transactions in the economy and to check generation of unaccounted wealth. The two per cent TDS is one of the important steps.
Read EquityPandit’s Nifty Outlook for the Week