Estate tax, cash transaction tax mooted to fight black money
Emboldened by bigger mandate, Prime Minister Narendra Modi is all set to intensify the fight against black money.
Among measures to clamp down on graft and ill-gotten wealth, the government may consider re-introducing an estate tax on inherited property and banking cash transaction tax (BCTT).
The suggestions are being discussed by tax authorities before proposing them for the Budget 2019-20, expected to be presented in the second week of July.
"They are at initial stages of discussion. These have to be vetted thoroughly for its effectiveness," said an official aware of Budget consultations.
Following the massive mandate for second-term, Prime Minister Modi is yet to take oath and recommend names for ministers for appointment. A new finance minister has to be also identified from among top leaders of the BJP.
The Centre earlier levied estate tax but abolished it in 1985.
"Imposing estate tax would be a retrograde step. This will badly affect real estate sector which is already in the grip of slowdown. The government needs to take steps that would accelerate the economy," said an industry watcher, maintaining enough anti-graft measures were already in place.
The proposal to impose banking cash transaction tax has been under consideration, but the government has so far held onto it.
In 2005, the then Finance Minister P Chidambaram had introduced a BCTT of 0.1 per cent on cash withdrawals above Rs 10,000, a limit which was later raised to Rs 25,000. The tax was, however, scrapped in 2009 due to low collection on this account.