12/06/2019 - Indian Economy

KEY POINTS

 Banking Cash transaction tax is a tax of 3-5 per cent on cash withdrawal of Rs 10 lakh in a year, a move to discourage cash usage in the economy and resultant black money. It is direct tax leviable on banking cash transactions.

It is not a good step towards attaining the goals of Digital economy

·        After GST, the government has a mine of information on people’s incomes and revenues which needs to be mined assiduously.

·        Then, there is the data the taxman gets from Operation Insight which is a linking of various databases on the purchases of jewellery, automobiles, property, credit card payments, airline tickets, etc.

·        With each bank account in the country mandatorily linked to a PAN, the government can always ask the banks to generate a list of cash withdrawals beyond a certain amount from banks.

·        Each PAN card has to be linked to an Aadhaar number, bank managers can be asked to conduct periodic scans to weed out fake PANs.

·        More important, the government claimed that, as a result of demonetisation, it had collected a wealth of information on people; and these can be used to track tax evaders easily rather than introducing BCTT.

·        At the time of demonetisation, the government claimed it had identified 23.5 lakh PANs that appeared suspicious  the cash deposited wasn’t in keeping with their known sources of income.

·        So another information source is clearly not needed to crackdown on black money.

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