In order to curb the movement of Black money, the Finance Minister had announced that a TDS of 2 percent would be deducted for withdrawal of more than 10 million in a year. In such a year, the number of people who deposit such large amount, the firm, etc. is about 1.75 lakh.
Finance Minister Nirmala Sitharaman, while making a new announcement in the budget presented on Friday, had said that those who have cleared more than Rs 1 crore in the year, would have to pay 2 percent TDS (tax deducted at source). The Finance Minister has probably announced this to curb the movement of black money. According to an estimate, the number of people who deposited such large amount, firm etc. in the year is about 1.75 lakh.
According to the Times of India, in the year 2017-18, more than 1.75 lakh entities (people, companies, institutions etc.) have collected more than Rs 1 crore in a year. Some part is right in law, so there is something wrong. Some such withdrawals are legitimate money from ATM management companies, traders, etc., while many examples are also of the funds drawn by the wrong people. In many cases it was seen that the pane mentioned for it was a fake.
Now by putting 2% TDS on such withdrawals, the government is hoping that such people, firms will be monitored and these people will be forced to tell the right pan, because Advance would like to make adjustments at the time of payment of tax.
According to the newspaper, in the year 2017-18, more than one lakh PAN holders withdrew Rs 1 to 2 crore rupees annually. Apart from this, there were about 500 entities who took out more than Rs 100 crore cash from their accounts. According to the value, about half of the total withdrawal was for those who had cleared more than 100 crore rupees. Significantly, the government keeps account of all the current accounts, which can be withdrawn to 50 lakh rupees or more. In addition, banks also give account of some savings accounts to the government.
The government wants to promote digital transactions by reducing cash flow, and this proposal of budget is also a step in that direction. It is believed that most traders and companies do not need to take out large amounts of cash, because now the use of online transfers is increasing.
In his budget speech, the Finance Minister said, "TDS will be taken by two percent of the bank's withdrawal of cash in excess of one crore rupees in one year. In order to make these provisions effective, necessary amendments are being made in the Income Tax Act and the Payment and Settlement Systems Act, 2007.
The Finance Minister said that there are many digital payment arrangements like Bhim UPi, UPI-QR Code, Base Pay, NEFT and RTGS for paying at a lower cost. These systems can be used to move the country towards cashless economy.
