It is important for bank customers to know that withdrawals from bank accounts are taxed. Find out how much you can withdraw.

Bank Transaction Limit

You can withdraw money from your bank account anytime. But you need to carefully plan your withdrawals to avoid paying unnecessary taxes. For this you need to know how much you can withdraw in a year without paying tax. The provision of charges for withdrawals exceeding the prescribed limit is not limited to ATM transactions.

Bank Transaction

The same rule applies to withdrawing money from a bank. people think they can withdraw as much money as they want from their bank account for free. But under Section 194N of the Income Tax Act, if a person withdraws more than Rs 20 lakh in a financial year, he has to pay TDS. However, this rule is only for those who have not filed Income Tax Return (ITR) for 3 consecutive years.

Bank Customer

Such persons will have to pay TDS if they withdraw more than Rs.20 lakh from banks, cooperatives or post offices. However, ITR filers get more relief under this provision. Such customers can withdraw up to Rs 1 crore in a financial year from a bank, post office or co-operative bank account without paying TDS. According to this rule, if you withdraw more than Rs.1 crore from your bank account, TDS will be deducted at 2 percent.

Bank Transaction

If you have not filed ITR continuously for the past three years, you will have to pay 2 percent TDS on withdrawals above Rs 20 lakh and 5 percent TDS on withdrawals above Rs 1 crore. Banks charge a fee for ATM withdrawals above a specified limit. RBI has hiked service charges for ATM withdrawals from january 1, 2022.

ATM transactions

Currently, banks charge Rs 21 for transactions that exceed the prescribed limit. Earlier one had to pay Rs.20. Most banks offer five free transactions every month from their ATMs. Apart from this, three transactions are free from ATMs of other banks. However, in metro cities, you can withdraw money only three times from your own bank.

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