News | Tax

Post Office Schemes: Cash Withdrawals above Rs 20 lakh to attract 2%-5% TDS

The Department of Posts has issued new rules for deduction of TDS if the aggregate withdrawal from all post office schemes is more than Rs 20 lakh. The provision includes withdrawals from PPF also, writes The Economic Times. 
 
As per the new provisions under Section 194N of Income Tax Act 1961, if an investor has not filed income tax returns (ITR) for the previous three assessment years then tax deducted at source (TDS) will be deducted from the withdrawal amount. 
 
The new rule is applicable from July 1, 2020. 
 
As per the provisions, if aggregate cash withdrawal by an investor exceeds Rs 20 lakh but does not exceed Rs 1 crore during a financial year and he is a non-ITR filer, then TDS at the rate of 2% will be deducted from the amount exceeding Rs 20 lakh. 
 
In case total cash withdrawal from all post office accounts exceeds Rs 1 crore in one financial year then TDS at 5 per cent will be payable on the amount exceeding Rs 1 crore. 
 
If you are an ITR filer and cash withdrawal exceeds Rs 1 crore by an ITR filer in a financial year the TDS will 2% of the amount above Rs 1 crore. 
 
The changes have not yet been incorporated. 
 
In order to facilitate Post Offices to deduct TDS, the Center for Excellence in Postal Technology (CEPT), will provide the required details to the concerned circles. Details such as account, PAN number of the depositor and the TDS amount to be deducted will be provided by the CEPT. 
 
The respective Post Office of the depositor will deduct TDS and the account holder will be informed about the deduction.
 

User

  Loading...
  Loading...

To continue


Please
Sign Up or Sign In
with

Email

We are listening!

Solve the equation and enter in the Captcha field.

Changes in Our Business Model
 
 
Greetings from Moneylife Advisory Services
 
Between financial years 2019-21, SEBI has come up with extensive changes to investor advisor regulations. On Sep 23, 2020, SEBI had issued new additional guidelines. This comes just two months after extensive changes announced in July 2020. Earlier, in December 2019 there was an ad hoc circular
 
As a result of these changes, IAs, cannot accept fees through credit cards, will have to sign a 26-clause investor agreement, have to maintain physical record written & signed by client, telephone recording, emails, SMS messages and any other legally verifiable record for five years. IAs were already asked to record the suitability and rationale for every piece of advice given, sign them and store them for five years.
 
While these extensive and frequent changes, designed to strengthen the conduct of IAs are well-meaning, these have sharply increased compliance efforts and cost. We, being online advisors, find many of changes harder to implement, compared to advisors working in the physical space. We will have to have an army of advisors, administrative and tech staff to be compliant. If we do this, we will have to divert money to these areas and the cost of our service will double. We want to remain the least-cost service in the market to benefit more and more people. In the circumstances, we are forced to change our business model from “advisory” to “research”. This will mean the following:
 
What remains the same:
  • Recommendations on insurance, investment and Lion stocks, will continue as a part of the MAS premium subscription. Our strength has always been research and this will remain available to you through our recommendations.
  • The magazine and all textual content will remain as part of the service
  • The investools will have to be reworked and will offer model portfolios. We will have to suspend the restructuring tool.
 
What changes:
  • The interactions in Ask / Handholding will offer investment advice but not specific to your situation. It will offer information on investment products and also clarify your doubts about various financial products. It will be a forum for information, not for advice. This will be implemented with immediate effect and our guidelines in Ask, reflect this now.
 
Over the next few weeks our site and our communication to you will reflect these and other additional changes.
 
We feel this will not affect you much in terms of what really matters in investing: knowing what to buy and when to buy. This is our edge and it will still be available to you.
 
img
Debashis Basu
Founder