Tax On Rs.10 Lakh Cash Withdrawal In A Year?

Tax On Rs.10 Lakh Cash Withdrawal In A Year?

The Narendra Modi-led NDA government may possibly commence paying tax on the withdrawal of more than Rs 10 lakh cash in a year, as this will uplift digital transaction, discourage paper currency and put an end to illegal dealings of black money.

On this, the government may also make Aadhaar identification as a compulsory norm for all high-value cash withdrawals. This will help track individuals and tally tax returns. The UID authentification and OTP will also ensure that Aadhar numbers are not misused.

The Reserve Bank of India said it would waive the fee currently imposed on banks for using its NEFT/RTGS payment servers. The central government will also set up a panel to review charges imposed by banks on ATM withdrawals. While announcing the scrapping of charges on RTGS and NEFT transactions, the RBI said it was doing so to boost digital transactions.

The whole discussion arises just ahead of the budget announcement on July 5 and the government said that the move is not confirmed yet as it doesn't want to take a step that will cause a problem to the middle class and poor with high compliance. Almost a decade ago, the UPA government had introduced bank cash transaction tax but was forced to stop the method after an uproar. In fact, in 2016, a high-level panel of Chief Minister, headed by ex Andhra CM Chandrababu Naidu, recommended reintroduction of the levy for withdrawal of over Rs 50000, but the cash withdrawal tax was not implemented.