Government May Withdraw BCTT

The Banking Cash Transaction Tax is expected to be withdrawn in the budget 2007. The Government is working to withdraw such type of taxation in the coming budget. The center is trying to withdraw this tax after it got so many objections from the State Governments.


As to the present Cash Transaction tax system, the person is to pay tax from its current account. A rate of about 0.01% is being charged on cash withdrawals with a sum of more than 25,000. Even the Corporates are charged for a withdrawal of more than 100,000 in a day.


The Banking Cash Transaction Tax was introduced in the budget 2005-06 with a view of checking money laundering. For a developing country like India, where a parallel economy has existed over a period, the Banking Cash Transaction Tax has its importance.

However, the steps such as annual information returns and Prevention of Money Laundering Act undertaken by the Government to check the unaccounted money have brought impressive success.