Section 194N → Section 221
TDS on Cash Withdrawal exceeding certain limits
Quick Answer
Section 194N of the Income Tax Act, 1961 (TDS on Cash Withdrawal exceeding certain limits) corresponds to Section 221 of the Income-tax Act, 2025, effective 1st April 2026. Status: Retained.
What changed for Section 194N
The starting point is Section 194N of the Income Tax Act, 1961 — TDS on cash withdrawal exceeding certain limits. TDS @ 2% on cash withdrawals from banks exceeding Rs. 1 Crore (Rs. 20 Lakhs for non-filers).
The new code maps this to Section 221: the provision is retained and renumbered as Section 221 of the Income-tax Act, 2025, applying from 1st April 2026. Retained. Primary tool to discourage a cash economy.
On the ground, changes to Section 194N carry a High impact. Affects businesses dealing in large volumes of cash.
Sec 194N
Provision Summary
TDS @ 2% on cash withdrawals from banks exceeding Rs. 1 Crore (Rs. 20 Lakhs for non-filers).
Sec 221
Provision Summary
Retained. Primary tool to discourage a cash economy.
Key Changes & Highlights
- Limit for Co-operative societies enhanced to Rs. 3 Crore.
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Frequently Asked Questions
What does Section 194N of the Income Tax Act 1961 deal with?
Section 194N of the Income Tax Act, 1961 covers TDS on cash withdrawal exceeding certain limits. TDS @ 2% on cash withdrawals from banks exceeding Rs. 1 Crore (Rs. 20 Lakhs for non-filers).
Where does Section 194N of the ITA 1961 go under the Income-tax Act, 2025?
Section 194N of the Income Tax Act, 1961 maps to Section 221 of the Income-tax Act, 2025, effective 1st April 2026 (status: Retained). Retained. Primary tool to discourage a cash economy.
Why does the change to Section 194N matter for taxpayers?
The transition impact for Section 194N is rated High. Affects businesses dealing in large volumes of cash.
What are the key changes to Section 194N under the Income-tax Act, 2025?
Limit for Co-operative societies enhanced to Rs. 3 Crore. These points are specific to Section 194N (TDS on Cash Withdrawal exceeding certain limits).
Disclaimer: This mapping of Section 194N (TDS on Cash Withdrawal exceeding certain limits) to Section 221 of the Income-tax Act, 2025 is for educational and reference purposes only, based on publicly available drafts and circulars. As Section 194N is currently marked Retained, always confirm its treatment with a qualified Chartered Accountant before filing or making compliance decisions.
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