Starting immediately, any cash transaction of Rs. 200,000 or more—whether it’s a deposit or a withdrawal—will now be subject to a hefty 20.5% withholding tax for non-filers. This means that if you withdraw or deposit Rs. 2 lac in cash without being a tax filer, over Rs. 41,000 will be automatically deducted as tax. The move is part of the government’s broader effort to bring more people into the formal tax net and discourage undocumented cash dealings.

This development will significantly impact individuals and business owners who frequently deal in large cash amounts, affecting both their savings and spending power. To avoid this heavy deduction, it’s more important than ever to ensure your tax filings are up to date. Filing your tax returns regularly allows you to avoid the higher non-filer rates and protects your income from such deductions.

Additionally, switching to digital transactions where possible can help you stay out of the high-tax bracket, while keeping your income sources properly documented adds another layer of financial security. If you’re unsure about how these changes affect you, it’s advisable to consult a tax expert to stay compliant and make informed financial decisions.