We tend to purchase things in cash in our day to day life but in the coming days that shall not remain the same. From the 1 June 2016, government has imposed an additional of 1% tax on cash purchase of goods and services over Rs 2 Lakhs or above. This additional tax is valid only on cash transactions and bullions but not on the gold as the limit for that has been increased up to Rs 5 Lakhs and above. This tax shall also apply on the buyers who purchase luxury cars over Rs 10 Lakhs.
Securities Transaction Tax (STT) has also increased from current 0.017% to 0.05%, which shall directly throw an impact on the pockets of the Indians.
In the Budget speech, Jaitley had said: “I also propose to collect tax at source at the rate of 1 per cent on purchase of luxury cars exceeding value of Rs 10 lakh and purchase of goods and services in cash exceeding Rs 2 lakh.”
“For compliant tax payers with resources, this levy not only advances collection of tax when the expenditure is incurred, but it provides data to tax authorities to identify the persons who incur such expenditure, but may be missing from the tax base.”
The main object to impose this additional tax on the goods and services purchase with cash transactions is to identify those individuals who do not have a tax base. This shall enable the tax authorities to figure out such persons residing in the Indian economy.
Verdict: Government is imposing various types of tax to bring the transparency the flow of money so that authorities can identify the individuals obstructing with shelf- stored black money. Day by day India’s GDP is improving and developing in quite a faster pace. This tax implementation shall bring out the unethical individuals performing false activities by money laundering or by not paying the tax, that directly throw an impact on any countries economy.
Author: Mrs. Viveka Verma Nagar