If your account is in Post Office or you invest in post office schemes then this news is for you only. Now if you withdraw more money than the stipulated amount, then TDS can be deducted on it. This rule of withdrawing money applies to various deposit schemes ranging from PPF. These rules related to Section 194 N of the Income Tax Act 1961 (IT Act 1961) have come into force from July 1, 2020. In such a situation, let us tell you about the new rules related to withdrawal of money from the post office and TDS deduction.
TDS may be reduced by 5% on cash withdrawal
If you do not file ITR and withdraw more than 20 lakhs but less than one crore in a financial year, then there will be a deduction of 2% TDS on it. But if your withdrawal amount is above one crore, then 5% TDS will be deducted on withdrawals above one crore.
Relief to those submitting ITR
However, if a customer files an income tax return, he is given some relief in this rule. That is, in such a situation the rules of TDS deduction change. In this situation, if the withdrawal of money is more than Rs 1 crore in a financial year. Then you have to pay 2% income tax on the amount above one crore. However these changes have not been included yet. The Center for Excellence in Postal Technology (CEPT) has asked to examine the transactions of such depositors for the time period from 1 April 2020 to 31 December 2020 for TDS deduction. At the same time, the post office is also working on the promotion of these rules.
Departmental action will be done like this
The CEPT will send these necessary notifications to the CBS and CPC of the concerned circle. Then the details of such accounts, PAN number of the depositor and how much TDS to be deducted will be provided by CEPT. The CPC in-charge of the concerned circle will send all these information to the concerned postal mines so that the TDS of such customers can be deducted without any mistake.
The concerned post office will inform the account holder in writing of this deduction after deducting the TDS of its depositor. At the same time, the post master will be sent to HO / SBCO on such Bouchers related to TDS Amount.
Now, since these are the procedures and requirements that come under the purview of the rules, the postmaster will be personally responsible for deduction of TDS under the rules.