Get all your news in one place.
100’s of premium titles.
One app.
Start reading
Livemint
Livemint
National
Asit Manohar

ITR filing: TDS rules you should know while choosing income tax return form

Income tax return: If TDS has been deducted on withdrawal of money in any bank/post office account in excess of the limit prescribed under section 194N, then the taxpayer will have to use ITR-2 form instead of ITR-1 form.

According to tax and investment experts, TDS rules applied on ITR form for an earning individual during ITR filing is explained in Section 194N of the income tax act, 1961. They said that if a taxpayer withdraws cash to the tune of 1 crore or above, then in that case the earning individual can't file ITR using ITR-1 form. However, in case the earning individual hasn't filed ITR in last three financial years, then in that case the limit would be 20 lakh instead of 1 crore. Experts said that in such condition, the taxpayer will have to file its ITR using ITR-2 form.

On how TDS rule plays while choosing the correct ITR form, Mumbai-based tax and investment expert Balwant Jain said, "Under Section 194N of the income tax act, 1961, a taxpayer won't be able to file its income tax return using ITR-1 form if it has done cash withdrawal to the tune of 1 crore or more. However, in case, the earning individual has not filed ITR in last three financial years, then in that case the applicable TDS limit would be 20 lakh instead of 1 crore."

Echoing with Balwant Jain's views, SEBI registered tax and investment expert Jitendra Solanki said, "To know whether one has crossed the upper limit prescribed under Section 194N, one need not to move from pillar to post, but to check under which section the bank or post office has deducted one's TDS. If the taxpayer has crossed cash withdrawal limit under Section 194N, then in that case bank would deduct TDS under this section."

Asked about which ITR form a taxpayer can use if there is TDS deduction under Section 194N, Balwant Jain said, "If there is TDS deduction under Section 194N, then in that case the taxpayer will have to use ITR-2 form instead of ITR-1."

The due date for ITR filing for FY 2021-22 and AY 2022-23 is 31st July 2022.

Sign up to read this article
Read news from 100’s of titles, curated specifically for you.
Already a member? Sign in here
Related Stories
Top stories on inkl right now
One subscription that gives you access to news from hundreds of sites
Already a member? Sign in here
Our Picks
Fourteen days free
Download the app
One app. One membership.
100+ trusted global sources.