Indian government may ban cash transactions above Rs 3 lakh
Furthering the recommendation of Special Investigation Team (SIT) on black money, the government of India is likely to come up with a new tax law to ban cash transactions above Rs. three lakh.
“The SIT recommendations are under consideration. As far as the Income Tax Department is concerned, we have put a one percent TCS (Tax Collected at Source) on cash transactions, we have made PAN quoting mandatory, all these aspects are also part of the SIT recommendation to stop the use of cash in the economy, Rs three lakh and above is under consideration,” stated Rani Singh Nair, chairperson, Central Board of Direct Taxes (CBDT) while inaugurating an ASSOCHAM International Tax Conference.
She also informed that the government of India is holding talks for the renegotiated India-Singapore tax treaty.
“So now that we have renegotiated Mauritius, Singapore is under discussion. We are discussing it, we hope we will soon have a discussion with them as this is a bilateral treaty, so we have to take the concerns of both the countries and then we will sign,” said Nair.
She said that during the course of past two years, the endeavour of the government and the CBDT has been to facilitate investments into India to ensure that the taxpayer pays his taxes with the ease of doing business because ultimately the tax coffers will never be full if there is no business in India.
“For the last two years we have believed that participating in rule-making, law-making will help in making more robust tax laws and with this idea, we have every time put all our major initiatives in the public domain and after seeing what people have said, we have even proposed amendments to facilitate the business. This change of thinking, this proactive approach has gone down very well both internally in the country and I can say that this is the way to move forward,” opined Nair.
She also said that role of the tax administration is not only limited to tax and it is also to listen and to guide the taxpayer and see that the advice given is correct.
“I have also felt that for international business, for foreigners who are coming to invest in India, we should have a kind of a guide available on the internet, in the market which tells step-by-step what are the tax laws, tax procedures and the way to go forward in doing business in India,” said the CBDT chairperson.
“I have had a lot of interactions with foreign business, with associations who have come to meet me in my stint in the CBDT and they all feel that they are adrift in India because there is not one place that they can go to and get advice and then they can digest that advice and take their own decisions,” added Nair.
“If we have to make India a place to do business, we have to have this kind of facility not only in the government but in the private space also, where any business which is coming to India comes with a lot of confidence, that the advice they get is complete and comprehensive. I think when we talk of international taxation, this is the one aspect that we need to focus on and we need to see that India becomes a favoured place of doing business,” further said Nair.
On the issue of expediting the date of general budget presentation to January, she said that it will bring in more efficiency in the budget making as two-three months of the financial year would not be lost in the budget process.