If the total amount of withdrawals from post office schemes crosses 20 lakhs in a financial year, then TDS will be deducted.
The post office has now implemented a new rule regarding cash withdrawal. Under the new rule, TDS will be deducted for withdrawing cash in excess of a limit in a financial year. If the total amount of withdrawals from post office schemes crosses 20 lakhs in a financial year, then TDS will be deducted. It also includes PPF withdrawal.
Under section 194N of the Income Tax Act 1961, if an investor has not filed the return for the last three years, then TDS will be deducted on the withdrawal amount. This rule was implemented only on 1 July 2020. Under the new rule, if the investor has withdrawn more than 20 lakhs and less than 1 crore in a financial year, he has not been filing returns for the last three years, in such a situation, deducted 2% TDS on the amount of more than 20 lakhs. Will go.
If the total amount of withdrawals is more than 1 crore in a financial year, then 5% TDS will be deducted. If the investor files a return, only 2% TDS will be deducted on the additional amount for withdrawing more than 1 crore. At present, this rule has not been implemented.
CEPT, the agency providing technology service to the post office, has prepared the complete details of such investors from 1 April 2020 to 31 December 2020. When this rule is implemented, CEPT will give full information of such investors such as account number, PAN number, deposit amount and how much TDS to be deducted, to the Postal Department. In that case every post office will deduct TDS and its information will be given to the investor.
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