Examine whether TDS provisions are attracted in the following cases: (i) Kite & Co LLP withdrew from its bank account 68 lakhs cash for buying…

(i) Section 194N, provides that every person, including, inter alia , a banking company, who is responsible for paying, in cash, any sum or aggregate of sums exceeding 1crore during the previous year to any person from one or more accounts maintained by such recipient-person with it, shall deduct tax at source @2% of sum exceeding 1crore. In the present case, M/s Kite & Co. LLP has withdrawn - 1.26 crores in cash in aggregate during the previous year 2023-24. Since aggregate amount of cash withdrawals exceed 1crore, bank is required to deduct tax at source on the amount exceeding 1crore i.e.,26 lakhs though he withdraws 68lakhs for buying agricultural produce from farmers, agriculturists, being raw material required for manufacturing of finished products by it. (ii) Any person responsible for paying interest (other than interest referred to in section 194LB or section 194LC or section 194LD) or any other sum chargeable to tax (other than salaries) to a non-corporate non-resident or to a foreign company is liable to deduct tax at source at the rates in force. Since interest of 98,000 on Capital Gains Bond issued by Power Finance Corporation Ltd. is taxable in the hands of Mr. Ajay, being a non-resident, the provisions for tax deduction at source under section 195 are attracted in this case.