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    SB Order 18/2022 | TDS Deduction in Post Office on cash withdrawal under the provisions of Section 194N of IT Act 1961

    SB Order No. 18 / 2022. Deployment of functionality in Finacle CBS for Deduction of TDS in respect on Cash Withdrawal under the provisions of Section 194N of Income Tax Act 1961.

    File No. FS-109-27/2019-SB

    (F.S. Division)

    Dak Bhawan, New Delhi — 110001

    Dated: 10.10.2022


    Subject: Deployment of functionality in Finacle CBS for Deduction of TDS in respect on Cash Withdrawal under the provisions of Section 194N of Income Tax Act 1961 — Regarding.

    Download SB Order 18/2022 - TDS Deductions on cash withdrawal in Post Office in PDF

    This has the reference to the SB Order No. 05/2021 dated 09.03.2021. The Post Offices were ordered to deduct the TDS under Section 194N of IT Act 1961 on the basis of the details of all such account holders shared by CEPT, Chennai on monthly basis.


    2. The functionality for deduction of TDS under Section 194N of IT Act 1961 has been deployed in Finacle in various patches on 30.05.2022, 22.06.2022 and 04.08.2022. Accordingly, the TDS deduction under Section 194N will be made in Finacle System based on the inputs i.e. percentage of TDS to be deducted, entered by the post office concerned. It shall be the responsibility of the post offices concerned to update correct percentage of TDS to be deducted for the depositor concerned, in CBS Finacle System. A detailed SOP to be followed by the post offices is attached herewith.


    3. Therefore, CEPT Chennai will not share details of all account holders TDS for whom TDS deduction under Section 194N is applicable, henceforth.


    4. All the Head Post Offices shall continue to file the TDS returns for all the TDS deductions made under Section 194N of IT Act, 1961.


    5. The post offices should not perform any credit or debit transaction using CTM menu for any incorrect deposit / withdrawal transactions adjustment. In case of any wrong deposit / withdrawal, the transaction must be reversed using HCRT menu. Adjustment of wrong credit / debit using CTM menu will lead to wrong deduction of TDS under Section 194N, wrong reporting of cash transactions to IT Department in SFT-005 and thereby customer grievances.


    6. This may be circulated to all the Offices for information and necessary actions.



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