TDS will be deducted up to 5% on withdrawal of Cash from Bank

Section 194N – TDS on cash withdrawal 

As per Sec 194N of Income Tax Act From 01/07/2020 if you have not filled the returns of income for all of the three assessment years relevant to the three previous years, for which the time limit of file return of income under sub-section (1) of section 139 has expired, immediately preceding the previous year in which the cash withdrawn from Bank  (Public or Private), Co-Operative Bank or Post Office then said Payer (Bank / Co-operative Bank / Post Office) have to deduct TDS as follows :

(a) an amount equal to two per cent of the sum where the amount or aggregate of amounts, as the case may be, being paid in cash exceeds twenty lakh rupees during the previous year but does not exceed one crore rupees; or

(b) an amount equal to five per cent of the sum where the amount or aggregate of amounts, as the case may be, being paid in cash exceeds one crore rupees during the previous year: 

E.g. If you have not Filled Income Tax Return for FY 2016-17, FY 2017-18 & FY 2018-19 and date of Filling Income Tax Return under sub-section (1) of section 139 has not expired for FY 2019-20 then on withdrawal of cash exceeding Rs. 20 Lakh Payer will deduct TDS @ 2% and if your cash withdrawal exceeds Rs. 1 Crore then Payer will deduct TDS @ 5%.