1. Black money: Shome panel wants govt to tax you for your cash withdrawal

Black money: Shome panel wants govt to tax you for your cash withdrawal

A high level official panel today proposed levying of banking transaction tax on withdrawal of cash beyond a specified limit...

By: | New Delhi | Updated: December 3, 2014 11:24 AM

A high level official panel today proposed levying of banking transaction tax on withdrawal of cash beyond a specified limit in a day to check black money and was not in favour tax amnesty scheme.

A report by the Parthasarathi Shome Committee, appointed by the previous UPA government, suggested taxing farmers with large land holdings in addition to host of measures to widen the net.

“Taxpayers keep waiting for amnesty schemes to be announced and take advantage of these schemes to build their capital.

“Amnesty schemes also cause inequity among taxpayers, and there is no proof that they improve taxpayer behaviour among evaders. They, therefore, should not be encouraged through amnesties,” said the report of Tax Administration and Reform Commission (TARC). It was the third report in the series.

Highlighting that there is no instrument at present that captures details of cash withdrawals from bank accounts, it said such information would help the I-T department widen its information base on the use of black money.

Making a case for Banking Cash Transaction Tax (BCTT), it said: “…IT Act should be suitably revised to include in its ambit cash withdrawals exceeding specified amounts in a day from bank accounts other than savings accounts.

“Alternatively, BCTT should be reinstated as an effective administrative measure”.

BCTT was introduced in June 2005 to track unaccounted money and trace its source and destination, but was withdrawn in April 2009.

BCTT was levied in respect of cash withdrawals in a day exceeding Rs 50,000 in the case of an individual and Rs 1 lakh in the case of other persons.

The report further said large farmers should be brought into the tax net.

“Against a tax free limit of Rs 5 lakhs on agricultural income, farmers having income above much higher threshold income, such as Rs 50 lakh, could be taxed. This will broaden the taxpayer base,” it said.

Talking about other steps to widen tax net, it said a conducive environment and tax culture should be created to encourage unorganised retailers to pay tax dues voluntarily.

The panel also recommended that wealth tax base can be increased by including intangible financial assets in the base while considerably raising the threshold and decreasing the wealth tax rate.

There has been increase in the number of non-corporate taxpayers for the categories Rs 2-5 lakh and Rs 5-10 lakh over the period 2007-12 but only a moderate fluctuation in the category below Rs 2 lakh over the same period.

Only 33 per cent of registered persons under service tax filed returns in 2012-13 and the number fell short of the previous year’s figure by approximately 1 lakh. Also, more than 50 per cent of registered central excise taxpayers are not filing returns.

It also pitched for tax administration measures to improve SMEs tax compliance.

Tags: Black Money
  1. A
    Amish Pandit
    Dec 3, 2014 at 11:14 am
    this move will only increase black money in market....as people will refrain from keeping money in banks....with this it feels that, those days are not far when we will be taxed for breathing air.....
    Reply
    1. S
      Sudheer Kumar
      Dec 3, 2014 at 4:20 pm
      Implement arthakranti proposals!!!
      Reply
      1. S
        Sudheer Kumar
        Dec 3, 2014 at 4:20 pm
        Implement arthakranti proposals!!! www.arthakranti
        Reply

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