A Comparison between Banking Cash Transaction (BCCT) Tax and Non-Cascading Transaction (NCT) Tax
What is Banking Cash Transaction Tax (BCCT)?
Banking Cash Transaction Tax (BCCT), is a taxation system, that compliments existing Income Tax, is aimed at tracking unaccounted money, by applying tax on Debit Transactions beyond a specified value, and is in force for a period of 4 years (i.e. from June 01, 2005 to March 31, 2009), in India.
What is Non-Cascading Transaction Tax (NCT)?
Non-Cascading Transaction Tax (NCT), is an all inclusive taxation system, that is in Draft Proposal stage, is aimed at superseding Income Tax, GST and Property Tax, by Collecting Tax on Credit Transactions, in a non-cascading approach, irrespective of transaction value and the mode of transaction (Digital Transaction / Cash Transaction), while applying specific exemptions to certain kind of transactions, and to specific industries respectively.
The Collected Tax Revenue will be appropriately shared between all the Beneficiaries (i.e., Central, State & Local Governments, in addition to Banks, that facilitated the transaction), this has the potential to root out black money, by including everyone in the tax scope, and is being proposed as an alternative Taxation System in India, by Ideal Nation, in Year 2019. The details of the Draft Proposal, can be found at,
https://www.idealnation.net/2019/04/08/non-cascading-transaction-tax/
A brief comparison between the two taxation systems follows:
| Banking Cash Transaction (BCCT) Tax | Non-Cascading Transaction Tax |
| 1) Charged on Debit Transactions (in the scope of Withdrawals, Encashment of Term Deposit, Purchase of Demand Draft etc…), when the subjective amount is > Rs.10000 / day. | 1) No Transaction Tax on Debit Transactions, as this is charged only on all Deposits / Credit Transactions, irrespective of transaction value, and when that happen in to bank accounts of Individuals / Organizations, while allowing exemptions in specific scenarios. |
| 2) Transaction Tax is 0.1%. | 2) Transaction Tax for Individuals: 3%. Transaction Tax for Organizations: 6%. |
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3) This is an attempt to track Cash
Withdrawals, as per proposal, while exemptions are applicable in
specific re-deposit scenarios into bank accounts of the same bank.
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3) This is a more simple and inclusive taxation
system, that will happen on every Credit Transaction, creating
accountability trail at a major scale.
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| 4) This compliments existing Income Tax, and is levied on Individuals / Organizations. | 4) This will replace existing Income Tax, GST Tax and Property Tax, and is levied on Individuals / Organizations. |
| 5) Extra Compliance Mandates for Banks, in addition to tax return submissions w.r.t. Income Tax and GST Tax. | 5) Primary Compliance Requirement to Banks, that replaces separate tax return submission requirements w.r.t. Income Tax & GST Tax. |
| 6) India being a Cash Majority Economy, takes more time to become a Cashless Majority Economy. | 6) Even though India is a Cash Majority Economy, adoption of Cashless Concept is a much easier possibility with NCT Tax in place, as this fills so many gaps, to understand movement of money, and to contain black money, with this approach. |
| 7) Enacted from June 01, 2005, by the then Finance Minister of India, Mr. P. Chidambaram, it stayed in force till March 31, 2009, and has lesser impact, than anticipated, during that time. | 7) This is in Draft Proposal stage, and has sure potential to be adopted, with inclusive enhancements. |
This is a Request for Comment to everyone, to please share your Feedback / Comment / Suggestion, along with Acceptance / Non-Acceptance, through Comments Section and Like / Dislike options, right after logging in to the Website (with Linkedin / Twitter / Google), on the Policy Reform Proposal,
“Non-Cascading Transaction Tax – An Inclusive Taxation Scheme Proposal”, that can be found at https://www.idealnation.net/2019/04/08/non-cascading-transaction-tax/.
