TDS on Cash withdrawals — Section 194N (now 393)
Rate
| Type of payment | Rate (with PAN) | Notes |
|---|---|---|
| itr filer | 2% | — |
| non filer 3yrs | 2% | 5% above Rs 1 crore for non-filers |
No valid PAN: 20% or the normal rate, whichever is higher (Section 397(2), old 206AA).
Threshold
TDS applies when: ₹3,00,00,000 (co operative society); ₹1,00,00,000 (others (ITR filer)); ₹20,00,000 (non filer (3 yrs)). TDS is on the amount exceeding the threshold.
Worked example
Paying ₹10,00,000 (plus GST) to cash withdrawals on 10 June 2026:
Exemptions & relief
- Government, banks, business correspondents, ATM operators
If you get it wrong
Late deduction: 1% per month or part thereof, from date deductible to date deducted.
Late deposit: 1.5% per month or part thereof, from date deducted to date deposited.
Late return: Rs 200/day (234E equivalent), capped at TDS amount in the statement.
Non-deduction: 30% of expenditure disallowed for non-deduction/non-deposit (40(a)(ia) equivalent); wrong payment code can trigger the same — verify scope under 2025 Act.
Good to know
- Co-op society Rs 3 crore (code 1064), others Rs 1 crore (code 1065); non-filer special slabs apply
FAQs
What is the new section number for 194N from FY 2026-27?
Under the Income Tax Act 2025, 194N now falls under Section 393. The payment/return code is 1064 or 1065.
What is the TDS rate under section 194N?
2% for itr filer; 2% for non filer 3yrs. If the payee has no valid PAN, 20% applies (or the normal rate, whichever is higher).
What is the threshold for 194N?
₹3,00,00,000 (co operative society); ₹1,00,00,000 (others (ITR filer)); ₹20,00,000 (non filer (3 yrs)).
Which TDS return is 194N reported in?
Form 140 (was 26Q), filed quarterly.
Written and reviewed by a CA firm. Verified 2026-06-08 against the Income Tax Act 2025 / Finance Act 2025. General information, not advice for your specific case.