Finance Ministry likely to review BCTT in Budget 2008-09
The government is likely to review the controversial Banking Cash Transaction Tax, primarily designed to track black money, and even possibly scrap it in the Budget for 2008-09.
By PTI |
NEW DELHI: The government is likely to review the controversial Banking Cash Transaction Tax, primarily designed to track black money, and even possibly scrap it in the Budget for 2008-09.
The tax is likely to reviewed in the budget and could even be withdrawn, sources said.
They said the Banking Cash Transaction Tax (BCTT), under which cash withdrawals above Rs 50,000 by an individual or firm from the savings account of a bank are taxed at 0.1 per cent rate, could be reviewed as growth rate of cash withdrawals from banks have declined and there is possibility of expansion of transactions under the annual information report (AIR) system.
"As other instruments become more effective, I think it would be possible to review BCTT next year," Finance Minister P Chidambaram had said while presenting the budget 2007-08 last year. The BCTT was introduced in June 2005.
Industrial chambers, including FICCI, have asked the Finance Minister to withdraw this tax in view of the fact that all high value transactions have now to be supported by the Permanent Account Number for the purpose of identification.
Apart from collection of vast information about transactions through AIRs, the Income tax Department is also collecting information from banks on suspected transactions under the Money Laundering Act.
Sources said an alternative before the Finance Minister could be to bring high cash withdrawals, say above Rs 50,000 under the purview of AIRs. The Minister had earlier said the transactions under the AIRs would be expanded at an appropriate time.
The tax is likely to reviewed in the budget and could even be withdrawn, sources said.
They said the Banking Cash Transaction Tax (BCTT), under which cash withdrawals above Rs 50,000 by an individual or firm from the savings account of a bank are taxed at 0.1 per cent rate, could be reviewed as growth rate of cash withdrawals from banks have declined and there is possibility of expansion of transactions under the annual information report (AIR) system.
"As other instruments become more effective, I think it would be possible to review BCTT next year," Finance Minister P Chidambaram had said while presenting the budget 2007-08 last year. The BCTT was introduced in June 2005.
Industrial chambers, including FICCI, have asked the Finance Minister to withdraw this tax in view of the fact that all high value transactions have now to be supported by the Permanent Account Number for the purpose of identification.
Apart from collection of vast information about transactions through AIRs, the Income tax Department is also collecting information from banks on suspected transactions under the Money Laundering Act.
ADVERTISEMENT
Sources said an alternative before the Finance Minister could be to bring high cash withdrawals, say above Rs 50,000 under the purview of AIRs. The Minister had earlier said the transactions under the AIRs would be expanded at an appropriate time.
Download
The Economic Times Business News App for the Latest News in Business, Sensex, Stock Market Updates & More.
The Economic Times Business News App for the Latest News in Business, Sensex, Stock Market Updates & More.
Download
The Economic Times News App for Quarterly Results, Latest News in ITR, Business, Share Market, Live Sensex News & More.
The Economic Times News App for Quarterly Results, Latest News in ITR, Business, Share Market, Live Sensex News & More.
ADVERTISEMENT
