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Small Savings Schemes: Know TDS Rules On Withdrawals For IT Return Filers & Non-Filers

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New guidelines for tax deduction at source (TDS) on small savings schemes have been implemented by the government. TDS will be deducted from a withdrawal amount of more than Rs 20 lakh from post office schemes, including the PPF, if income tax returns for the previous three assessment years have not been submitted. TDS will be 2% of the amount withdrawn from Post Office schemes in a financial year that exceeds Rs 20 lakh. If the amount crosses Rs 1 crore, TDS will be applied at a rate of 5% on the excess amount. This rule of the Income Tax Act of 1961, Section 194N, is in force from July 2020. If you file an ITR, though, the rules are different. Where an ITR filer's cash withdrawal in a financial year crosses Rs 1 crore. The amount above Rs 1 crore will be subject to a 2% income tax. TDS will be deducted only at the depositor's Post Office, and the account holder will be notified in written of the deduction. Even if you apply Form 15H/G, a declaration that your income is below the exempted cap, you will be subject to TDS. Section 194N does not relate to 15G/15H declarations.

 
Small Savings Schemes: TDS Rules On Withdrawals For IT Return Filers/Non-Filers

Note

Cash withdrawals from a post office account have been restricted to only four transactions, according to the most recent India Post update. If you make more than four withdrawals, you will be charged 0.05 percent of the total amount on each transaction that exceeds the cap. Withdrawing Rs 25,000 annually from a savings or current account will incur no charges. Following that, each withdrawal will be subject to a minimum charge of Rs 25 or 0.5 percent of the overall amount withdrawn. There is no charge if you make a cash deposit of up to Rs 10,000 in a month. A deposit in every post office savings account of more than that amount, however, will impose a minimum of Rs 25. The withdrawal cap at Post Office GDS (Gramin Dak Seva) Branches are also increased, according to India Post. Now, the cap has been raised from Rs 5000 to Rs 20000 per account holder. The minimum mandatory amount to maintain an India Post savings account is Rs 500, and if the minimum standard is not satisfied, an Account Maintenance Fee of Rs 100 will be charged. The account will also be automatically terminated if there is no balance. On the IPPB platform, there are no limits on the number of free transactions, but non-IPPB (India Post Payment Bank) transactions are limited to three. The law applies to mini statements, cash withdrawals, and cash deposits. Each transaction will be subject to a charge once the free limit in the Aadhaar Enabled Payments System (AEPS) - India Post Payments Bank has been reached. Any deposit made after the threshold has been reached will be charged at Rs 20. You must pay Rs 5 to get a mini statement. A charge of 1% of the transaction amount, with a minimum of Rs 1 and a maximum of Rs 20 including GST and Cess will be charged if funds are transferred to another account after the cap is surpassed.

Read more about: tds small saving schemes
Story first published: Friday, April 30, 2021, 11:58 [IST]
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