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Monday, July 13, 2020

Govt abolishes banking transaction tax

The levy was introduced in 2005 to track unaccounted money and trace its source.

Written by Agencies | New Delhi | Published: April 1, 2009 2:12:40 pm

Taxpayers will not have to pay levy on withdrawal of cash from banks with the government withdrawing the Banking Cash Transaction Tax (BCTT) from Wednesday.

The government had introduced 0.1 per cent BCCT in 2005 on cash withdrawals of more than Rs 50,000 (individuals) and Rs 1,00,000 for others in a single day from non-savings bank account maintained with any scheduled bank.

The tax has been withdrawn from April 1 following an announcement made by the then Finance Minister P Chidambaram in his budget speech for 2008-09,sources said.

In his Budget speech,Chidamabram had said,”The BCTT has served a very useful purpose in enlarging the information system of the Income Tax Department. Since the information is also being gathered through other instruments introduced in the last few years,I propose to withdraw this tax with effect from April 1,2009.”

The levy was introduced in 2005 to track unaccounted money and trace its source and destination.

Though BCTT was not introduced with the intention of revenue generation,the levy,as per the revised estimates,contributed to the exchequer Rs 600 crore during 2008-09. The BCCT collection was Rs 550 crore for 2007-08.

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