Monday, July 15, 2024
HomePersonal FinanceBank Transaction Rules: You will have to pay tax on withdrawing money...

Bank Transaction Rules: You will have to pay tax on withdrawing money from your bank account, know how much money you can withdraw in a year

Bank Transaction: Your money kept in the bank account also comes under the purview of rules. Therefore, it is very important to know how much money can be withdrawn easily without getting into tax hassles.

Bank Transaction: If you are confident of withdrawing the money lying in your bank account anytime, then wait a bit. You will have to plan the withdrawal carefully again so that you can avoid paying unnecessary tax. For this, you should know how much amount can be withdrawn in a year without paying tax. The rule of paying fee for withdrawing money more than the prescribed limit is not only applicable to ATM transactions but a similar rule is also applicable for withdrawing money from the bank.

How much cash can be withdrawn

People think that they can withdraw as much cash as they want from their bank account for free. But, under section 194N of the Income Tax Act, if a person withdraws more than Rs 20 lakh in a financial year, then he will have to pay TDS. However, this rule is only for those people who have not filed Income Tax Return (ITR) for 3 consecutive years. Such people will have to pay TDS if they withdraw more than Rs 20 lakh from any bank, cooperative or post office.

Relief to those who file income tax returns

However, those who file ITR get more relief under this rule. Such customers can withdraw up to Rs 1 crore in cash in a financial year from their bank, post office or co-operative bank account without paying TDS.

How much TDS will have to be paid

Under this rule, if you withdraw more than Rs 1 crore from your bank account, TDS will be deducted at the rate of 2 percent. If you have not filed ITR continuously for the last three years, then you will have to pay 2 percent TDS on cash withdrawal of more than Rs 20 lakh and 5 percent TDS on withdrawal of more than Rs 1 crore.

There is already a charge on ATM transactions

Banks charge a fee for withdrawing money more than the prescribed limit from ATM. RBI had increased the service charge on withdrawing cash from ATM from January 1, 2022. Now banks are charging Rs 21 for transactions exceeding the prescribed limit. Earlier one had to pay Rs 20 for this. Most banks provide five transactions free every month from their ATMs. Also, three transactions are free from ATMs of other banks. However, in metro cities, you can withdraw money free only three times from your own bank.

Shyamu Maurya
Shyamu Maurya
Shyamu has done Degree in Fine Arts and has knowledge about bollywood industry. He started writing in 2018. Since then he has been associated with Informalnewz. In case of any complain or feedback, please contact me
- Advertisment -

Most Popular

Recent Comments