No proposal to replace income tax with banking transaction tax: Govt
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New Delhi: There is no proposal “at present” to replace income tax with banking transaction tax (BTT), the government said on Friday.
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% 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 The levy was, however, withdrawn with effect from 1 April, 2009. The minister further informed that the collection of BCTT over the years has been very insignificant as compared to the 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 Rs50,000 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.