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TDS on Cash Withdrawal (Section 194N)

Banks, co-operative banks and post offices deduct 2% TDS on cash withdrawals above ₹1 crore in a year from your accounts with them (₹3 crore for co-operative societies). If you have not filed income tax returns for the last three years, TDS starts at ₹20 lakh, and the rate rises to 5% above ₹1 crore.

Quick answer (FY 2025-26 and FY 2026-27)

TDS rate
2% (5% for non-filers above ₹1 crore)
Threshold
₹1 crore a year per bank (₹20 lakh for non-filers)

TDS on cash withdrawal: rate chart

Payment Section (1961 Act) New section (2025 Act) Rate Threshold
Cash withdrawal by a person who has filed returns 194N 393(3), Sl. No. 5 2% of the amount above ₹1 crore ₹1 crore a year per bank
Cash withdrawal by a co-operative society 194N 393(3), Sl. No. 5 2% of the amount above ₹3 crore ₹3 crore a year
Non-filer (no return for all three previous years): ₹20 lakh to ₹1 crore 194N 393(3), Sl. No. 5 2% ₹20 lakh a year
Non-filer: above ₹1 crore 194N 393(3), Sl. No. 5 5% ₹1 crore a year

Who counts as a non-filer

The lower ₹20 lakh limit and the 5% rate apply if you have not filed returns for all three previous assessment years for which the filing deadline has passed. Filing for even one of those years keeps you on the normal ₹1 crore limit.

The limit is per bank (or post office) for the year, adding withdrawals across all its branches. Withdrawals by government bodies, banks, business correspondents and white-label ATM operators are exempt.

Is this TDS a tax on cash?

No. Cash withdrawal is not income. The TDS is credited against your tax for the year when you file your return, and refunded if your tax is lower. It exists to discourage large cash use and to track non-filers.

From 1 April 2026 the provision is in Section 393(3) of the Income-tax Act, 2025, with the same limits and rates.

TDS on cash withdrawal calculator

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TDS amount ₹0

Example: a non-filer withdrawing ₹1.5 crore pays 2% on ₹80 lakh (₹1.6 lakh) plus 5% on ₹50 lakh (₹2.5 lakh), ₹4.1 lakh in all.

Frequently Asked Questions

What is the TDS on cash withdrawal?
2% on cash withdrawn above ₹1 crore in a year from one bank. Co-operative societies have a ₹3 crore limit.
What is the TDS on cash withdrawal for non-filers?
2% on withdrawals between ₹20 lakh and ₹1 crore, and 5% above ₹1 crore, if no return was filed for all three previous years.
Is the ₹1 crore limit per bank or per account?
Per bank or post office, adding all accounts and branches with that bank.
Can I get the TDS on cash withdrawal back?
Yes. It is credited against your tax when you file your return, and any excess is refunded.
Is TDS charged on ATM withdrawals?
Yes, ATM withdrawals count towards the yearly total for that bank.
What is the new section for 194N?
From 1 April 2026 it is Section 393(3), Table Sl. No. 5 of the Income-tax Act, 2025.
What is the due date for depositing TDS on cash withdrawal?
By the 7th of the following month. For tax deducted in March, the due date is 30 April. Tax deducted under 194-IB by individual tenants is paid with Form 26QC within 30 days from the end of the month of deduction.
What happens if TDS on cash withdrawal is not deducted or deposited on time?
Interest is charged at 1% a month (or part of a month) from the date TDS was deductible until it is deducted, and 1.5% a month from deduction until deposit. Late filing fees, penalties and disallowance of the expense can also apply.
Which TDS return and certificate apply to TDS on cash withdrawal?
Deductors with a TAN file a quarterly return in Form 26Q (Form 27Q for payments to non-residents) and issue Form 16A to the payee each quarter. Individual tenants under 194-IB use Form 26QC and issue Form 16C.
How can the payee check the TDS deducted?
In Form 26AS and the Annual Information Statement (AIS) on the income tax portal. The TDS is then claimed as a credit against tax in the income tax return, and any excess is refunded.
Did the Income-tax Act 2025 change TDS rates from April 2026?
No. From 1 April 2026 the new Act renumbered the provisions (TDS is mainly in Sections 392 and 393), but the rates and thresholds carried over. Returns and challans for payments from that date use the new section references.

New section references are to the Income-tax Act, 2025, in force from 1 April 2026. Verify the table serial number against the official text before quoting it in a return or notice reply.

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