The Department of Post has released new regulations for subtracting tax deducted at source (TDS) on gross cash withdrawals of more than Rs 20 lakh by account holders of Small Savings Schemes, including the Public Provident Fund (PPF). If a taxpayer has not paid income tax returns for the previous three assessment years, new rules under section l94N of the Income Tax Act 1961 will take effect on July 1-2020, for non-filing of ITR.
Know All About New TDS Rules Released By the Department of Post
1. In the case of non-ITR filers: If the gross cash withdrawal during a financial year crosses Rs 20 lakh but less than Rs 1 crore, the income tax due is 2% of the amount above Rs 20 lakh.
2. In the case of non-ITR filers: If a cash withdrawal crosses Rs 1 crore in a fiscal year, an income tax of 5% of the amount above Rs 1 crore will be due.
3. In the case of non-ITR filers: If in a financial year cash withdrawals surpass Rs 1 lakh. The amount above Rs 1 crore will be subject to a 2% income tax.
4. These adjustments have not yet been implemented, but CEPT has defined and retrieved the specifics of such depositors for the term 1 April 2020 to 31 December 2020 in order to assist Post Offices.
5. The statement will be forwarded to the relevant Circle/CBS CPCs of the respective circles, along with account details, PAN number, and the TDS amount to be withheld.
6. The circle's in charge, CPC(CBS), shall forward the information to the relevant Post Office and allow TDS deduction from such customers/accounts without delay.
7. TDS will be deducted at the relevant Post Office. Such a deduction should be reported to the account holder in written format.
8. The concerned Postmaster will prepare and approve a voucher for the TDS amount, which will be circulated to HO/SBCO together with other SB vouchers.
9. It's a legitimate provision, and the postmaster in action is personally liable for deducting TDS in compliance with the law.
10. Non-deduction of TDS can result in a penalty or recovery.