What you need to know about Banking Transaction Taxes.
What was supposed to have been a 10 minute meeting with then-Gujarat Chief Minister Narendra Modi ended up lasting for 90 minutes. And in that period, Anil Bokil from a Pune-based group called Artha Kranti Pratishthan managed to sell the idea of demonetisation that Modi as prime minister would enact in November of 2016.
And now the same man behind the idea has suggested that the government may soon enact a bold new form of taxation called the Banking Transaction Tax (BTT).
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In this form of taxation, all taxes barring custom duty (that would include the Income Tax too) would be entirely abolished. Instead the government would collect taxes based on banking transactions both credit and debit. This would include transactions made via cheques and ones done electronically.
Bokil in an interview with CNN IBN made the claim that the government, which has now been bolstered by the victory in the Uttar Pradesh state elections, might be taking this decidedly bold move. According to Bokil, the Banking Transaction Taxes will promote more transparency.
The group had first suggested a similar model to the BJP party back in 1999. In this method, all taxes that will be collected through transactions will then be distributed to the state governments and the Central government.
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While this is merely speculation at this juncture, Bokil is confident that this move would further put a definitive check on black money within the country. The group has long lobbied for the idea of putting a 2% tax on banking transactions.
As the country moves towards a more cashless economy, we can only wait and see if the Income Tax joins ₹500 and ₹1,000 notes in chapters of history as something that used to exist.