Payments banks to help in move to ‘cashless economy’

Finance Minister Arun Jaitley on Sunday said in a post on his official Facebook page, that “most assessments [of money abroad in Liechtenstein and in the HSBC bank at Geneva] have been completed and wherever illegalities are being found, criminal prosecutions have been launched against beneficiaries of these bank accounts.” A total peak balance of about Rs. 6,500 crore in these accounts has been assessed, he said, referring to the government’s actions in evaluating the quantum of black money stored abroad.

The Finance Minister laid the blame for incidence of tax evasion on previous governments and their high tax rates.

“Regrettably, our high taxation regime in the past eventually ended up encouraging tax evasion… The early decades after independence witnessed India with high taxation rates, prompting people to evade. The capacity of the state to detect evasion was less than adequate. Over the years, India has slowly started moving towards moderate rates of taxation,” he said, adding that the Modi government was still committed to reducing the corporate tax rate to 25 per cent from the existing 30 per cent over the next four years, a promise Mr. Jaitley made in his budget speech.

Plastic money

Mr. Jaitley said the government was well aware of the need to shift to a cashless economy.

“Being seized of this problem, the government has been working with various authorities in order to incentivise this change. The opening of a large number of payment gateways, Internet banking, payment banks and the emerging reality of e-commerce will prompt the use of banking transactions and plastic money to rise significantly,” he wrote.

He added that the government was taking several other steps to curb black money transactions within the country.

The government was at an advanced stage in considering making it mandatory to provide PAN card details for cash transactions beyond a certain limit, he said.

“The monitoring regime of the income tax department has been strengthened and… its ability to detect large cash withdrawals, or large cash transactions which enter the system, is being strengthened.”

The Finance Minister lays the blame for incidence of tax evasion on previous governments and their high tax rates

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