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Tax On Cash Withdrawals?


Posted on September 30 2020

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Many offers have been made to encourage the digital transactions, a cash tax is being considered by the government. If cleared, the offer can figured out in the Budget of 1st February, 2017.
 
The government is weighing the pros and cons of the offer, which can be a tweaked form of the earlier banking cash transaction tax of the UPA government, under which the tax will be collected on the cash withdrawals above a certain ceiling from the bank accounts.
 
A number of steps are under discussion. The main aim of the new tax is to diminish the capacity of the cash economy and encourage the digital transactions. The government has taken a series of measures since the demonetisation in November last year to offer the digital transactions. The final call will be taken at the highest political level.
 
The idea is under attention and there is good chance it can be announced in the Budget. The officials who shared the condition Officials who spoke did so on the condition could not be identified, since they are not authorised to speak on the Budget matters. The Special Investigation Team (SIT) on the black money has already suggested a ban on the cash transactions above `3 lakh and a `15 lakh limit on the individual cash holding.
 
Also the Tax Administration Reform Commission (TARC) has suggested the reintroduction of banking cash transaction tax (BCTT). Presently, the TARC had noted that there is no instrument that captures details of the cash withdrawals from the bank accounts other than savings the accounts data.
 
Some Experts and officials have been pointing out the digital transactions involve, in some forms, accurate costs at micro levels in terms of the annual fees for the credit cards or the transaction charges at points of sale, the macro cost of producing large amounts of cash is even greater.
 
 
 
A study done in January 2015, the Cost of Cash in India, commissioned by the MasterCard and brought out by the Institute For Business in the Global Context predicted that India's central bank and commercial banks bear an annual currency operations cost of Rs 21,000 crore. The Government strategists on the post demonetisation policies have been emphasising that the saving on the costs of currency operations is an economic plus, apart from the transparency advantages of the digital transactions.
 
Tax Assist is a professional income tax consultancy in India for both corporate houses and individual tax payers; the latter comprising Salaried Individuals, Seafarers, Professionals and Non Resident Indians.
 
 
With the help of Tax Assist and its team of income tax professionals, taxpayers can minimize their Income Tax liability, maximize their net income and create opportunities to save for current and future needs while maintaining proper accounting standards and income tax returns which are compliant with the Law.

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