No proposal to replace Income Tax with Banking Cash Transaction Tax
April, 18th 2017
There is no proposal "at present" to replace Income Tax with Banking Transaction Tax or BTT, the government said today.
To a query if the government has any proposal to replace the Income Tax with BTT, Minister of State for Finance Santosh Kumar Gangwar said: "There is no such proposal under consideration of the government at present."
There is no tax by the name of BTT in the statute, he said in a written reply in the Lok Sabha.
He said however that earlier a Banking Cash Transaction Tax (BCTT) was being levied at the rate of 0.1 per cent on cash withdrawals from banks exceeding specified limit.
The BCTT was introduced in 2005 by the then UPA finance minister P Chidambaram. The levy was, however, withdrawn with effect from April 1, 2009.
The minister further informed that the collection of BCTT over the years has been very insignificant as compared to collection of Income Tax.
In January, however, the government had said that it will examine the recommendations of the chief ministers' panel on encouraging digital payments post demonetisation for levying BCTT on cash deals of Rs 50,000 and above before taking a final view on it.
With Andhra Pradesh Chief Minister Chandrababu Naidu as convener, the panel on digitisation had submitted its interim report to Prime Minister Narendra Modi.