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Wednesday, Apr 13, 2005

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ICAI wants cash transaction tax move dropped

Our Bureau

New Delhi , April 12

THE Institute of Chartered Accountants of India (ICAI) has urged the Government to withdraw its proposal to levy a banking cash transaction tax, stating that the proposed measure may not give the desired result of checking tax evasion.

The institute, in its post-Budget memorandum, said the objective of having an audit trail could be achieved by asking the bank to provide information on the withdrawal of money in cash in the annual information return, prescribed under Sec 285BA of the Act.

As a further anti-tax avoidance measure, ICAI suggested that taxpayers should submit details of all bank accounts in their names in the annual information return. The name and address of the branch as well as the branch code must be given so that the information can be cross-checked.

If this suggestion is not acceptable, the institute has alternatively suggested that the limit of Rs 10,000 be increased to Rs 50,000 and the limit per day should be with reference to each branch of a bank, and not with reference to each bank.

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