In order to trap the black money our honorable Finance Minister Mr. P. Chidambaram has levied Banking Cash Transaction Tax in the Finance Act 2005. This tax is levied on cash withdrawls from the bank above the specified limits. This tax is applicable from all cash withdrawls from June 1, 2005.
In the Finance Act 2008 our finance minister has withdrawn this tax from 01 April 2009. This means that on or after 01st April 2009 any sum of cash can be withdrawn from the bank account without paying any tax. As per him the purpose for which this tax was levied has been fulfilled . But no one know that whether the purpose has been fulfilled or the tax has been withdrawn as part of a statregy to capture the vote bank in the forthcoming elections. # Benefits of Banking Cash Transaction Tax (BCTT)
* It will be a positive step against Black Money, as all currency denominations above a certain amount would be scrapped and it would force Black Money hoarders to switch to electronic methods of transaction. And with electronic transactions, a tax would be deducted straightway with every transaction at a nominal rate. It will drastically reduce the scope of hoarding cash wealth and evade taxes using the loopholes of Tax Laws.
* It will bring a large number of people under the taxation ambit.
* BCTT will help in achieving governments of making India a Cashless Economy.