Govt. May Introduce ‘Cash Tax’ To Discourage Cash Transactions
Govt. of India is all set to introduce the final nail in the coffin for killing cash based transactions across India, and to ensure that more and more digital transactions take place. As per some unconfirmed reports, a new form of ‘cash tax can be introduced in the upcoming budget, which will severely dampen cash flow in the country, and encourage digital movement of money.
Meanwhile, India’s top retailers have claimed that demand for retail items is back post-demonetization, and they are expecting a bumper end-of-season sale in the coming months. In short, demonetization had no effect on their annual turnover.
‘Cash Tax’ For Discouraging Cash Transactions?
Some unnamed officials from the Finance Ministry have said that in the upcoming budget on February 1st, Govt. may introduce a special ‘cash tax’ on all cash-based transactions in the country.
One official said, “A number of steps are under discussion”, adding, that the final decision would be taken “at the highest political level”.
Three possible decisions which Govt. may announce on February 1st, to discourage cash based transactions:
Special ‘cash tax’ on all cash based transactions by reintroducing banking cash transaction tax (BCTT) as recommended by The Tax Administration Reform Commission (TARC), headed by Parthasarathi Shome
Banning all cash based transactions above Rs 3 lakh
Placing a limit of Rs 15 lakh on individual cash holding
The final decisions would be announced by Finance Minister Arun Jaitley when he gives the Budget speech.