Bank Transaction Tax

[anshulseth]

Indian budget was out yesterday, and it came out with an interesting but ridiculous theory of putting a bank transaction tax.

Now, for every withdrawalof cash above Rs. 10000, the account owner has to shell out 0.1% in taxes.The govt. says it will discourage black money transactions.

Lot of ppl hv already raised their voices against this.
Most of the ppl transacting in black money don't transact thro. banks.
Even if they do, it is miniscule.
N the amount that has been proposed(Rs. 10000) is very less. Even a savings account person can take out more than Rs.10000 in a day.

Also, it would create a lot of problems for common ppl, say if I hv to carry money for some purpose, i wud not take out more money for fear of losing my money.
while paying education fees, amounts do exceed Rs 10000.
so, i feel tht this idea is pretty far fetched, n cud hv been avoided.

Wht does the group feel?

[usathyan]

I agree that most people who deal with black money dont deal with banks...but, the possible theory is that cash cannot be accounted for, so what you spend the 10k for may go unaccounted....like drugs, dollars etc....(of course, this is your choice...)

but frankly, who uses hard cash these days? i guess most people use a check or draft or use a CC....if you have lots of money, and deposit it in bank - the govt anyways knows about it...so, no point there about taxing on using it.....this is almost discouraging people to deposit money in banks...maybe a good sign for private brokers...

In either case, the taxes are probably too small a step to discourage illegal transactions...(10 bucks for 10k is quite small)...

so, i am not really convinced this will serve any good cause....(maybe the congress cause)

[Neogen]

Wow!

Now thats really interesting tax I have seen. Rs 10,000 is equal to $ 500 only, this is not a big amount. So you have to pay tax to withdraw cash from ATM, is it some type of turbo tax or what!

But, as mentioned by usathyan, why do you need cash.. I dont think any merchant establishment will refuse payment by Credit card or cheque. Its so prevalent to use CC or Cheque, that one hardly think to use cash, unless I am spending less than $50.

I think the point behind this tax is not the charge of tax, but the intention of Indian Government to manage black money!