The Central Board of Direct Taxes (CBDT) had exempted from TDS cash withdraws by Authorized dealer and FFMC

The Central Board of Direct Taxes (CBDT) exempted the cash withdrawal by the authorized dealer as well as its franchise agent and sub-agent; and Full-Fledged Money Changer (FFMC) licensed by means of the Reserve Bank of India and its franchise agent from TDS under Section 194N subjected to conditions as stated in the Notification made by Income Tax on 15th October 2019.

The Notification No  80/2019-Income Tax stated that in exercise of the powers as conferred by clause (v) of the provision to section 194N of the Income-tax Act, 1961 (43 of 1961), the Central Government, after discussion with the Reserve Bank of India (RBI), hereby specified that the authorized dealer as well as its franchise agent and sub-agent; and the Full-Fledged Money Changer (FFMC) licensed by means of the Reserve Bank of India and its franchise agent, maintaining a separate bank account from which withdrawal is done only for the purposes of,-

•    purchasing of foreign currency from foreign visitors or non-residents who are visiting India or from resident Indians on their coming back to India, in cash in accordance with the directions or guidelines issued by Reserve Bank of India; or

•    disbursement of inward remittances towards the recipient beneficiaries in India in cash under Money Transfer Service Scheme (MTSS) of the Reserve Bank of India;

and a certificate is provided by the authorized dealers as well as their franchise agent and sub-agent, and the Full-Fledged Money Changers (FFMC) as well as their franchise agent towards the bank that withdrawal is only for the purposes as stated above and the directions or guidelines issued through the Reserve Bank of India was adhered to.

Explanation – As per the purposes of this notification, “authorized dealer” hereby meant an individual who is authorized as an authorized dealer in sub-section (1) of section 10 of the Foreign Exchange Management Act, 1999 (42 of 1999).

The notification will be deemed to have come into force with effect from the 1st day of September, 2019.

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eStartIndia Team