Banks can now check the status of income tax returns or ITRs of their customers based on their Permanent Account Number (PAN). Through this facility banks or post offices can get the applicable rate of TDS under Section 194N of the Income-tax Act, 1961 by entering the PAN of the person who is withdrawing cash.
Section 194N of the Income-tax Act, 1961 mandates banks and post offices to deduct tax on cash withdrawal made by any person if sum of aggregate withdrawals in a financial year exceed ₹1 crore. The tax shall be deducted at the rate of 2% on the amount of cash withdrawal exceeding Rs. 1 crore.
But if the withdrawer has not filed his income tax return for three previous years, the threshold is lower, at ₹20 lakh. For non-filers the TDS rate is 2% of withdrawals exceeding ₹20 lakh in a year and 5% on cash withdrawal exceeding Rs. 1 crore.
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