The Statutory Brief

IT Act 1961 → 2025 / Section 194N

TDS

Section 194N → Section 393

TDS of 2% on cash withdrawals above ₹1 crore

Section 194N of the old Income-tax Act, 1961 · new section 393 under the Income-tax Act, 2025

New reference Section 393(3), Table Sl. No. 5; exclusions 393(4), Sl. No. 18

Income-tax Act, 1961Section 194N

  • 2% on cash withdrawals above ₹1 crore in a year (₹3 crore for co-operative societies)
  • Non-filers: 2% above ₹20 lakh and 5% above ₹1 crore
  • Exemptions for Government, banks, business correspondents, white-label ATMs

Applies to FY 2025-26 (AY 2026-27) and earlier years.

Income-tax Act, 2025Section 393(3), Table Sl. No. 5; exclusions 393(4), Sl. No. 18

  • Section 393(3), Table Sl. No. 5: 2%
  • Threshold ₹1 crore (₹3 crore where recipient is a co-operative society)
  • No separate higher rate or ₹20 lakh threshold for non-filers in the table
  • Exclusions in 393(4), Table Sl. No. 18

Applies from tax year 2026-27 (from 1 April 2026).

What changed

Consolidated into section 393. The non-filer slab (₹20 lakh / 5%) does not appear in the 2025 Act table.

Practice notes

  • Cash withdrawals from 1 April 2026 are tested against the new table; withdrawals in FY 2025-26 under 194N including the non-filer proviso.
  • The TDS on cash withdrawal is creditable against the recipient's tax; it is not a cost.

These are summaries, not the statutory text. Read the bare Act for both sections on the Income Tax Department's official site, which also has a side-by-side comparison utility.

Frequently asked

What is the TDS on cash withdrawal under the new Income Tax Act 2025?

2% on cash withdrawn above ₹1 crore in a tax year (₹3 crore for co-operative societies), under section 393(3), Table Sl. No. 5.

What is section 194N called in the new Income-tax Act, 2025?

Section 194N of the Income-tax Act, 1961 corresponds to Section 393(3), Table Sl. No. 5; exclusions 393(4), Sl. No. 18 of the Income-tax Act, 2025, which applies from 1 April 2026 (tax year 2026-27).

What changed in section 194N under the new Income Tax Act?

Consolidated into section 393. The non-filer slab (₹20 lakh / 5%) does not appear in the 2025 Act table.

Is section 194N still applicable for FY 2025-26?

Yes. Income of FY 2025-26 (AY 2026-27) and earlier years is governed by section 194N of the 1961 Act. Section 393(3), Table Sl. No. 5; exclusions 393(4), Sl. No. 18 of the 2025 Act applies from tax year 2026-27.

Related sections

269ST→186No cash receipt of ₹2 lakh or more194A→393TDS on interest other than interest on securities (FD, RD, loans)40A(3)→36Disallowance of cash expenses above ₹10,000 a day (and related-party payments)