TDS Exemption on Cash Withdrawal

TDS Exemption on Cash withdrawal by Authorised Dealer and FFMC

TDS Exemption on Cash withdrawal by Authorised Dealer and FFMC

CBDT exempts cash withdrawal by the authorised dealer and its franchise agent and sub-agent, and Full-fledged money changer (FFMC) licensed by the Reserve Bank of India and its franchise agent from TDS under Section 194N subject to conditions specified in Notification No. 80/2019-Income Tax dated 15th October 2019.

This notification shall come into force with effect from 1st September 2019.

As per the notification, this is applicable for the following:

  1. the authorised dealer
    • the franchise agent of an authorised dealer
    • or sub-agent of an authorised dealer
  2. Full-fledged money changer (FFMC) licensed by the Reserve Bank of India
    • Franchise agent of FFMC

Under the condition that the above listed should be maintaining a separate bank account where withdrawal is made only for the below listed:

  1. Purchase of foreign currency in cash as per guidelines or directions issued by Reserve Bank of India from:
    • foreign tourists or
    • non-residents visiting India or
    • from resident Indians on their return to India or
  2. Disbursement of inward remittances to the recipient beneficiaries in India in cash under Money Transfer Service Scheme (MTSS) of the Reserve Bank of India;

As per the RBI guidelines, a certificate is issued by the above-mentioned authorised dealers, franchise agent and sub-agent of authorised dealers, and the Full-Fledged Money Changers (FFMC) and their franchise agent to the bank that the cash withdrawal is made only for the purposes specified above conditions and the directions or guidelines issued by the Reserve Bank of India have adhered.

The details of “authorised dealer” can be referred from Foreign Exchange Management Act, 1999 under sub-section (1) of section 10 (42 of 1999).

The relevant notification from the Ministry of Finance, Central Board of Direct Taxes, can be accessed here:

TDS Exemption on Cash Withdrawal by Authorised Dealer

Post by Arnold Thomas

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