Income tax department has included commercial banks in the list of agencies with which tax authorities can share information. it is indicated that huge amount of cash is being withdrawn by the persons who have never filed income-tax returns. Now Banks can also check the status of ITRs Of their customers with their PAN Number. in this facility Banks and Post offices can get applicable rates of TDS Under section 194N Of Income tax Act 1961 when they enter their PAN number to make a check on huge cash withdrawals.
With effect from July 1 this year if a person has not filed income tax returns for the last three consecutive years and he is withdrawing Rs 20 lakh or more in a financial year, then TDS is applied .The rate of TDS is 2% if the cumulative withdrawal amount from all banks is between 20 lakh to 1 crore. and if this amount exceeds Rs 1 crore then the applied rate of TDS is 5%.
Verification of Applicability
Income tax department has already provide a link http://www.incometaxindiaefiling.gov.in/home for the” Verification of applicability u/s 194N” since 1st July this year. By putting a person pan number banks and post office can get applicable rate of TDS under section 194 of Income tax act, 1961
The department has now released a new functionality that is ITR filing compliance check. In which Scheduled commercial banks SCBs can check the IT return filing status of Pan in bulk mode. All the information related to this like procedure and format is notified to Scheduled commercial banks SCBs has been updated confirmed by the income tax department. Government has taken great initiative by giving these rights to banks and Post offices .Now the huge cash withdrawals by the persons not paying income tax will be checked easily and also they are applicable for TDS.