AU SMALL FINANCE BANK

FAQs - TDS on Cash Withdrawal

1. Is TDS applicable on cash withdrawal?

Yes, TDS is applicable on cash withdrawals w.e.f. 1st September 2019 in case cash withdrawal exceeds defined threshold limit as mentioned under the law. TDS provision will be applicable even if you do not have any taxable income in that financial year. However, certain changes w.r.t. rate of the said TDS have been made in section 393(3) w.e.f. 1st April 2026.

2.  What is the rate at which tax will be deducted?

As per the provisions of section 393(3) as applicable from1st April 2026, TDS @2% is applicable on entire amount if the total cash withdrawals exceed Rs. 1 crore during the financial year (Rs. 3 crores for co-operative societies), irrespective of their ITR filling status.

Refer below illustration of TDS deduction on cash withdrawal:

Note: In case of customer’s PAN is inoperative (i.e. PAN is not linked with Aadhar), then TDS is deducted with higher rate @20%.

3.  How threshold limit of Rs. 1 Crore will be computed if cash withdrawn by me is from different branches of AU Bank?

The threshold limit of Rs. 1 Crore is bank-wise and not branch-wise of the Bank. Thus, while computing this limit, entire cash withdrawal from all the branches of AU Bank shall be considered.

4.  How threshold limit of Rs. 1 Crore will be computed for different modes of cash withdrawal?

Threshold limit of Rs. 1 Crore will be computed by accumulating total cash withdrawal under all modes i.e. TDS will be applicable if cumulative cash withdrawal done through ATM withdrawal, cash withdrawal from all the branches, cash withdrawal from AEPS/UPI, redemption of Term Deposit in cash etc. exceeds Rs. 1 Crore during the financial year.

5.  Will cash withdrawal by 3rd party through bearer cheques be considered as cash withdrawal in customer account?

Yes, 3rd Party cash withdrawal will be considered for TDS deduction. Therefore, if overall cash withdrawn by you, including 3rd party cash withdrawal through bearer cheque, from one or more bank accounts maintained with AU Bank exceeds Rs. 1 crore, then TDS will be deducted on entire amount of cash withdrawal.

6.  Is the limit of Rs. 1 Crore with AU Bank includes cash withdrawn by me from any other bank?

No, limit of Rs. 1 Crore is applicable at AU Bank’s level. If you have withdrawn cash exceeding Rs. 1 Crore from all the accounts maintained with AU Bank, then only TDS will be deducted. For instance, if total cash withdrawn is Rs. 60 Lakhs from accounts maintained with AU Bank and Rs. 60 lakhs from an account or accounts maintained with another bank, then no TDS will be deducted by AUSFB.

7.  Which entities are exempted from TDS on cash withdrawal?

In this regard, following entities fall under exemption:

1. Government;
2. any banking company or co-operative society engaged in carrying on the business of banking or a post office;
3. any business correspondent of a banking company or co-operative society engaged in carrying on the business of banking in accordance with the RBI guidelines;
4. any white label automated teller machine operator of a banking company or co-operative society engaged in carrying on the business of banking, in accordance with the authorization issued by the Reserve Bank of India;
5. such other person(s) as the Central Government may notify in the Official Gazette. Please note that, CBDT has notified following entities as eligible for TDS exemption, subject to fulfilment of specified conditions there in:
   • - Commission Agent or trader operating under Agriculture Produce Market Committee and registered under any law relating to Agriculture Produce Market.
   • - Cash Replenishment Agencies and franchise agents of White Label Automated Teller Machine Operators subject to fulfillment of certain conditions.
   • - Authorized dealer registered under section 10(1) of Foreign Exchange Management Act, 1999 and its franchise agents and sub-agents.
   • - Full-Fledged Money Changer licensed by RBI and its franchise agents.

8.  Whether I will be able to claim TDS Credit at the time of filing ITR?

Yes, you can claim credit of the amount of tax deducted at source on cash withdrawal(s) at the time of filing ITR on the basis of quarterly TDS certificates which will be sent to you via e-mail or courier.

9.  Is it mandatory to provide PAN on cash withdrawal?

In case PAN is not available, then cash withdrawal is not allowed aggregate Rs. 10 lakhs or more during the year.

If you have any further queries on this, please visit your nearest AU Bank branch.