Banking Transaction Tax Pdf : advantages,disadvantages -BTT– Hello Friends Welcome To StudyDhaba.Com .Here We are Sharing Some important Points About Bank Transaction Tax (BTT) And Its Advantages and Disadvantages .Banking Transaction Tax Pdf : advantages,disadvantages -BTT

Banking Transaction Tax Pdf : advantages,disadvantages -BTT

What is BTT? -Bank transaction tax india 2017 pdf

  • BTT, or Banking Transaction Tax is a proposed method of taxation which would be charged on all forms of bank transactions – credit and debit.
  • Arthakranti has proposed a taxation rate of 2 per cent on all forms of banking transactions. The tax would be charged on both – cheque payments and electronic methods of transactions.
  • The tax would be collected by government and equally distributed between Centre and the respective state where transaction took place.
  • The BTT as proposed by Arthakranti aims to abolish all other forms of taxes, except customs on imports.

What are the advantages of Banking Transaction Tax?

yojana Magazine February  Pdf Download Hindi & English free

Lucent Audio MP3 General Knowledge download -lucent gk 2018 audio

Vision IAS Prelims Test Series  Pdf Free Download -CSP 2017 Tests

Yojana Magazine Pdf Download Hindi & English ,2018,2017,2016,2015

Download India Yearbook  PDF Released By Govt Of India

Download UPSC Prelims 37 Years Previous Papers PDF Solution

Download Indian Economy Ramesh Singh 8th Edition Pdf Free 2018

Download Old NCERT books PDF Free -Hindi & English -UPSC,SSC

Indian Government Schemes pdf 2017,2018 -Modi Govt Schemes 2018

IBPS PO 2017 Study Plan pdf – IBPS PO  30 Days Study Plan

Hindi Optional Material Download – Free UPSC Materials Download

Food Processing Industry pdf Importance,Challenges,Present Scenario

Organic Farming pdf – Organic Farming In India,Advantages,Types

RRB ALP Syllabus 2018 Pdf – RRB Assistant Loco Pilot Syllabus

The implementation of BTT could lead to several positive outcomes. While some of them are populist in nature, others tend to eradicate the menaces which have plagued the Indian economic system since decades. Here are the merits:Bank Transaction Tax Pdf -Banking Transaction Tax: advantages,disadvantages

  1. Crackdown on black money: Since all currency denominations above Rs 50 would be scrapped, all players in the market would be forced to switch to electronic methods of transaction. The tax would be deducted straightaway with every transaction at a nominal rate of 2 per cent. Thus, the scope of hoarding wealth in form of cash and evading taxes through the loopholes in Income Tax would be avoided.
  2. More people within taxation ambit: As per data for the year 2013 accessed by CNBC, only about 12.5 million people pay taxes, which is roughly 1 per cent of the population. By scrapping the current taxation mechanism and imposing a tax on all banking transaction would naturally bring large number of people under the taxation ambit. This would result in massive increase in revenue for the government, which in turn could be used on schemes of social welfare.
  3. Increase in disposable incomes: At present, the salaried class of India pays at least 10 per cent as income tax on earning more than Rs 2,00,000 per annum. The slab of tax increases with the increase in income above Rs 5,00,000. The disposable income out of one’s salary gets directly reduced by 10-20 per cent at source. However, the 2 per cent BTT would allow 98 per cent of the salary to remain as disposable income.
  4. Cashless economy: Shifting towards electronic modes of transactions and cheque payments would lead to greater transparency and accountability. It would eliminate the scope of hiding unaccounted wealth.

What are the disadvantages of BTT in Indian economy?

Although Banking Transaction Tax primarily appears as a utopian policy, there are a number of drawbacks as well. Here are the demerits of imposing BTT in India:

  1. Cripple rural economy: The prerequisite to implement the BTT as proposed by Arthashastra, is to completely abolish notes of denominations above Rs 50. The move would spell a disaster for the rural economy, which largely deals in cash. Mainstream banking has reached the rural heartland of India in a staggered manner, with majority of Indians still not connected with the banking operations. From seeds to fertilizers, the agrarian sector is largely dependent upon hard cash for its day-to-day transactions.
  2. No flexibility in taxation: A progressive taxation policy is designed in a manner which creates the minimum burden on the poor and maximum liability on the rich. However, BTT would impose a uniform tax rate of 2 per cent, irrespective of the income under which a person falls. Apart from failing to tackle the rich-poor divide, the taxation mechanism under BTT would create a cascading effect, which is most undesirable for business. After 20 sequences of transaction related to same business operation, the total tax component would add up to 16 per cent.
  3. States with less emphasis on banking sector will lose revenue: Similar to GST, the implementation on uniform taxation mechanism across the nation could violate the federal principle. In the case of GST, the manufacturing states are bound to lose revenue, whereas, the consuming states are set to gain.

Under BTT, the states with massive amount of bank branches are about to gain, whereas, those backward states where banking is still at its nascent stage is bound to lose a major part of the revenue which they collected as taxes.

For example, Chandigarh has a bank branch per 3000 adults, on the other hand, Manipur has a bank branch per 33,000 citizens. The latter is expected to lose revenue in unprecedented manner if the mainstream process of taxation is abolished.

To Download This File In PDF Format Click On The Download Button Given below 

Bank Transaction Tax Pdf -Banking Transaction Tax: advantages,disadvantages

Important Links

Important Links For Study Material And Test Series 

Follow Us On Facebook – Facebook Page 

The Hindu Daily News Paper Important Articles Pdf 

Join StudyDhaba.Com Telegram Channel –

Latest Current Affairs Magazine 2019 Pdf

UPSC Prelims ,Mains ,Optional Study Materials

UPSC Prelims Test Series 2020 Pdf 

UPSC Mains Test Series 2019-2020 

UPSC Optional Test Series 2019-2020 

SSC Study Materials 2019-2020 Pdf 

IBPS Study Material 2019-2020 Pdf

Insurance Exams Free Study Materials Pdf 2019

NEET Exam Free Study Material Pdf 

Latest RRB Study Material Pdf 

Teaching Exams Study Material Pdf 

EContact US  [email protected] / [email protected]
Note & Disclaimer – All Study Materials Here are shared Only For Educational Purposes .Most of The Material Is Already Available On Internet .We Are Just Sharing That Link Only  . Whole Materials Is For Education Purpose Only .We Work hard to Provide You Quality Study Materials And Error Free Study Materials For All Competitive Exams .You can Also Share Study Materials,Notes Or Any Materials With Us .We Will Publish That Material On Our Website .It is a Humble Request To All Of You Please Share This Post With Your Friends And On Social Media .