No TDS on Withdrawals from Tax-Saving Schemes u/s 80CCA(2)(a) from April 4, 2025: CBDT [Read Notification]

The Central Board Of Direct Taxes (CBDT) under the Ministry of Finance issued Notification No. 27/2025 dated April 4, 2025, announcing that no tax shall be deducted at source (TDS) under Section 194EE of the Income-tax Act, 1961, on certain withdrawals made by individuals from tax-saving schemes covered under Section 80CCA(2)(a).

According to the notification, the individual assessee making withdrawals on or after April 4, 2025, from schemes referred to in clause (i) of Section 80CCA(1), such as the National Savings Scheme (NSS), will no longer be subject to TDS at the time of withdrawal.

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“In exercise of the powers conferred by sub-section (1F) of section 197A of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby specifies that no deduction of tax shall be made under section 194EE of the Act on payment of amount referred to in clause (a) of sub-section (2) of section 80CCA, which is withdrawn by an assessee being an individual, on or after the date of publication of this notification in the Official Gazette.”

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Previously, Section 194EE required the deduction of tax at source on amounts withdrawn from such schemes, especially where prior deductions under Section 80CCA(1) had been claimed.

This latest move is expected to ease the financial burden on taxpayers by allowing full withdrawal without upfront tax deduction. Although the withdrawn amount may still be taxable as income, depending on the individual’s tax slab.

The notification was signed by Surbendu Thakur, Under Secretary (Tax Policy and Legislation), and is effective immediately.

To Read the full text of the Notification CLICK HERE

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