Section 194N of the Income Tax Act mandates Tax Deducted at Source (TDS) on large cash withdrawals to discourage cash transactions. If you’ve filed Income Tax Returns (ITRs) in the last three years, TDS applies only when withdrawals exceed ₹1 crore in a financial year (at 2%). If you haven’t filed ITRs, the threshold drops to ₹20 lakh, with rates of 2% above ₹20 lakh and 5% above ₹1 crore.