Budget 2019: Govt may levy tax on cash withdrawals over Rs 10 lakh a year

[Kool_SRG]

Another proposal under consideration by the government is Aadhaar authentication for high-value cash withdrawals to help track income tax returns

The government might introduce a tax on cash withdrawals exceeding Rs 10 lakh a year, according to a report by The Times of India. The move will help the government clamp down on black money and promote digital payments.

Another proposal under consideration by the government is Aadhaar authentication for high-value cash withdrawals to help track tax returns, the report said. The Aadhaar authentication process will involve verification of the Unique Identification Number (UID) and a one-time password (OTP), so that the data is not misused.

In doing so, the government is going beyond seeking UID as is the case with deposits of over Rs 50,000 where PAN number has to be quoted.

 

The government is of the opinion that the majority of individuals and businesses do not need to withdraw over Rs 10 lakh in a year. Moneycontrol could not independently verify this story.

The consideration comes ahead of the Budget, which will be presented on July 5 by Finance Minister Nirmala Sitharaman.

The government is also planning to re-introduce the banking cash transaction tax (BCTT), which was imposed by the United Progressive Alliance (UPA) government in 2005 but was removed in 2009.

The Reserve Bank of India (RBI) has set-up a committee to review charges on ATM transactions. The central bank on June 6 lifted charges on NEFT National Electronic Funds Transfer) and RTSGS (Real-Time Gross Settlement) transactions.

Tax reforms to improve compliance are likely to be a crucial part of the newly-elected government Budget for 2019-20.

Top income tax payers could be rewarded with an invitation to tea with the Prime Minister or Finance Minister, according to a media report.

[Kool_SRG]

Govt may introduce tax on cash withdrawal of Rs 10 lakh in a year

Tax on cash withdrawal: While the final decision is yet to be made, the government is clear that it does not want to burden the middle and poor class with excessive compliance.

The government is considering the possibility of introducing a tax on cash withdrawals of Rs 10 lakh in a year. The government is mulling this move to discourage use of paper currency, promote digital payments as well as crack down on black money. Another proposal under consideration is mandating Aadhaar authentication for all high-value cash withdrawals as the government believes that the move will make it easy to track individuals and keep tax returns in check.

The government believes that annual cash withdrawals of more than Rs 10 lakh are not needed for most individuals and businesses, as mentioned in a report in Times of India. While the final decision is yet to be made, the government is clear that it does not want to burden the middle and poor class with excessive compliance.

In its Monetary Policy Committee (MPC) meet last week, the Reserve Bank of India (RBI) announced that it will do away with the charges on NEFT and RTGS transfers. The finance ministry believes that this will help in promoting non-cash transactions.

 

Moreover, this move is in line with other rules mandated by the government to keep cash transactions in check. A few years ago, the government made digital or cheque payments mandatory for businesses to claim benefits of business expenses. Following this rule, large companies are now making wage payments of more than Rs 10,000 through cheque or via bank transfer.

It remains to be seen if the tax on cash withdrawal will be implemented. Something similar was introduced by the UPA a decade ago. It had introduced a bank cash transaction tax that was met with a lot of resistance, and was withdrawn a few years later. The current amount of Rs 10 lakh in a year is much higher threshold.  

In 2016 a high-level panel of chief ministers, headed by then Andhra Pradesh CM N Chandrababu Naidu had recommended reintroduction of the tax on withdrawals of over Rs 50,000, among other measures to check cash use after demonetisation. However, the cash withdrawal tax was not implemented.

[tom brady]

Thengandi onguntam

[Hydrockers]

Good one 

But property lu ammina vallu em ayyipovali

Houses katte vallu koddiga large scale lo agriculture chese vallu labour wages ela ivvali ?

[Edhokati]

Illu konevallu construct chese valla paristhiti

[xano917]

7 minutes ago, Hydrockers said:

Good one 

But property lu ammina vallu em ayyipovali

Houses katte vallu koddiga large scale lo agriculture chese vallu labour wages ela ivvali ?

how is this good move ? slowly authoritarian government ga maruthundi  

[Hydrockers]

Just now, Edhokati said:

Illu konevallu construct chese valla paristhiti

Illu kone vallu bank loans and white lo ok 

But problem with construct chese vallaki

[Kootami]

18 minutes ago, Hydrockers said:

Good one 

But property lu ammina vallu em ayyipovali

Houses katte vallu koddiga large scale lo agriculture chese vallu labour wages ela ivvali ?

i think this is mainly for this reason anukunta

[Edhokati]

19 minutes ago, xano917 said:

how is this good move ? slowly authoritarian government ga maruthundi  

I feel same. 

Only rich ki matrame life easy

[Edhokati]

20 minutes ago, Hydrockers said:

Illu kone vallu bank loans and white lo ok 

But problem with construct chese vallaki

Not everyone goes with bank.

some save and use that.

[Kootami]

Just now, Edhokati said:

I feel same. 

Only rich ki matrame life easy

ee situation lo . who will qualify as rich ?

[Edhokati]

Just now, Kootami said:

ee situation lo . who will qualify as rich ?

Mlas mps industrialist ministers ..........

[reddyeee]

Already common people lost trust on banks after that brainless demonitisation move .. ippudu ee tuglak rules tho people will start avoiding banks completely unless there is no alternative. Good for crypto 🤐

[Edhokati]

1 minute ago, reddyeee said:

Already common people lost trust on banks after that brainless demonitisation move .. ippudu ee tuglak rules tho people will start avoiding banks completely unless there is no alternative. Good for crypto 🤐

Draft bill proposing jail for cryptocurrency trades in India causes stir

[reddyeee]

2 minutes ago, Edhokati said:

Draft bill proposing jail for cryptocurrency trades in India causes stir

ithe just convert to gold and hide at home or invest all u r money on lands antav.