Cash withdrawals from bank will not attract tax
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Cash withdrawals from bank will not attract tax from Wednesday. This is following abolition of the banking cash transaction tax (BCTT) in the Union Budget 2008-09.
The BCTT was introduced in Budget 2005-06 with the aim for setting an audit trail and to prevent money laundering using the banking channels and was applicable in whole of India except Jammu & Kashmir.
Cash withdrawals over Rs 50,000 in a single day by individuals and Hindu undivided families from current accounts attracted BCTT at the rate of 0.1%. The limit for others was Rs 1,00,000. Cash withdrawals from savings bank account did not attract the levy.
“The BCTT has served a useful purpose in enlarging the information system of the income-tax department. Since the information is also being gathered through other instruments introduced in the last few years, I propose to withdraw this tax with effect from April 1, 2009,” former finance minister P Chidambaram had said in his Budget 2008-09 speech.
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