The Central Board of Direct Taxes ( CBDT ) has notified that, Tax Deduction at Source ( TDS ) under Section 194N of the Income Tax Act, 1961 is not applicable on cash withdrawal for forex authorised dealers and full-fledged money changers licensed by the Reserve Bank of India ( RBI ).
The exemption is available if cash withdrawal is made only by foreign tourists, Non- Residents visiting India, resident Indian returning to India or for disbursement of inward remittances to the recipient beneficiaries in India in cash under Money Transfer Service Scheme (MTSS).
According to the notification, a certificate is furnished by the authorised dealers and their franchise agent and sub-agent, and the Full Fledged Money Changers (FFMC) and their franchise agent to the bank that withdrawal is only for the purposes specified above and the directions or guidelines issued by the Reserve Bank of India.
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