Cash payment deduction threshold: banks must deduct tax on large cash payouts, with increased deductions for non filers. Every banking company, co operative society engaged in banking, and post office making cash payments from one or more accounts must deduct tax at source when aggregate cash payments in the previous year exceed prescribed thresholds. The base deduction rate is two per cent; non filers face a lower threshold and stepped higher deduction rates. The Central Government, in consultation with the Reserve Bank of India, may notify recipients for exemption or reduced rates. Payments to the Government, other banks and co operative banks, post offices, business correspondents and authorised white label ATM operators are exempt.