New Delhi: Finance Minister P Chidambaram on 29 February proposed to withdraw the Banking Cash Transaction Tax, which provided for a 0.1% levy on certain cash withdrawals from banks.
In the budget proposals announced today for the fiscal year 2008-09, he said that no BCTT would be charged in respect of any taxable banking transaction after 31 March 2009.
The BCTT was introduced by the Finance Act, 2005 and provided for a 0.1% levy on “taxable banking transaction”. Such transactions included cash withdrawal of more than Rs50,000 for individuals and HUFs and Rs1,00,000 for others in a single day from non-savings bank account maintained with any scheduled bank.
Besides, the levy was also applicable on single-day cash receipt exceeding Rs50,000 for individuals and HUFs and Rs1,00,000 for others on encashment of one or more term deposists, whether on maturity or otherwise.