TDS on Cash Withdrawal- Vide Section 393(3) of Income Tax Act 2025

(Section 194N of Income Tax Act, 1961)

Pursuant to the implementation of the Income Tax Act, 2025 with effect from 01 April 2026, the provisions relating to Tax Deducted at Source (TDS) on cash withdrawals have been revised and are now governed under Section 393(3), Table – Sr. No. 5, replacing the erstwhile provisions of Section 194N of Income Tax Act, 1961.

These provisions are applicable to all cash withdrawals (including Over the counter, ATM, and other cash modes) made by customers from one or more accounts maintained with the Bank, aggregated at PAN level, during the relevant tax year for TDS applicability.

TDS will be applicable where aggregate cash withdrawals during the tax year exceed:

Category of Customer	Threshold
Co-operative Societies	₹3 Crore
All other persons	₹1 Crore

Rate of TDS

PAN Status	Applicable Rate
Valid / Operative PAN	2%
Inoperative PAN	20%

Key Points:

The earlier distinction of TDS rates based on filing / non-filing of Income Tax Returns has been removed.
No customer declaration is required for determining TDS applicability.
Once the aggregate cash withdrawal exceeds the applicable threshold (₹1 Crore / ₹3 Crore), TDS will apply on the entire amount of cash withdrawn during the tax year, not just the amount exceeding the threshold.

Entities exempted from TDS on Cash Withdrawal

Payment of certain amounts in cash referred to in section 393(3)	Payment made to: -
	(a)	the Government
	(b)	any banking company or co-operative society engaged in carrying on the business of banking or a post office;
	(c)	any business correspondent of a banking company or co-operative society engaged in carrying on the business of banking, as per the guidelines issued in this regard by the Reserve Bank of India under the Reserve Bank of India Act, 1934 (2 of 1934);
	(d)	any white label automated teller machine operator of a banking company or co-operative society engaged in carrying on the business of banking, as per the authorisation issued by the Reserve Bank of India under the Payment and Settlement Systems Act, 2007 (51 of 2007).

Customer may also reach to our IndusInd Bank representative.

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Need help? Simply connect to an IndusInd representative at 022 68577777 / 022 44066666 / 022 42207777 / 1860 267 7777 or write to us at tdshelp@indusind.com

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Grievance Redressal:

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https://www.indusind.bank.in/content/dam/regulatoryDisclosure/grievanceRedressal/grievance-redressal-mechanism.pdf

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