Withdrawing Rs 10 lakh a year may attract tax

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The central government has decided to introduce a tax on cash withdrawal of Rs 10 lakh in a year. It is aiming to discourage paper currency usage and black money circulation with the introduction of this tax.

The government also seeks to promote digital transactions with this move.

The government is also considering to mandate Aadhaar authentication for all high-value cash withdrawals as it will make it easy for the government to tally the tax returns by tracking individuals.

An official quoted in the report said, “A MGNREGA beneficiary needs to authenticate receipts using Aadhaar but someone withdrawing Rs 5 lakh need not do so as things stand.”

The government believes that since cash withdrawals of Rs 10 lakh or above per year are not needed for most individuals or businesses, the authentication will not hamper broad transactions.

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