Wednesday, March 02, 2005

Legal Extortion

Our dear old PC has done it again, but this time, many times over. 0.1 % tax on every withdrawal above Rs 10000. Reason?

As given by PC - To curb black money transactions which are usually cash. As given by "experts" - To move more away from cash regime, and endorse cheque and credit culture.

The argument given by PC screams back at his face. Which dare-devil-black-money-holder has the audacity to put his money in the bank. In bank lockers, yes but never in bank accounts. Now days, they don't allow to open an account without PAN or Income tax return. They don't allow to file Income Tax return without PAN or PAN application. So every thing is linked together.

No cash allowed on first deposits. More importantly, every account which exceeds the consolidated sum of Rs 25000, it's obligatory for the banks to send the details of the account to local income tax office. Then how the hell can black money come into the banks? One doesn't need to be a Chartered Account to see that or does PC thinks we all are damn fools.

Now the second argument i.e. moving towards credit regime. How many government institutions accept credit card or cheques? In metros, the situation might be better but what about smaller cities, towns, villages. Government does not even have proper cheque defaulting laws.

Their own institutions are not accepting cards or cheques. Their own house is not in order, and they want us to force into it. It's like throwing a person in water in order to make him/her learn swimming.

Now you would say "How many times you need to withdraw that amount? I am safe." No you are not. It's not as simple as it appears. First of all why should we pay this second tax on my already taxed income at all. And there other hitches as well. Even the encashment of a Fixed Deposit or request for Banker's Draft above the given sum is taxable.

What happens in hospital bill, school donations, buying stamp papers for property deeds, jewels, marriage expenses -almost everything comes under taxation. This is nothing but legalized hafta vasooli or bribe as we may call it. I hope better sense prevails on him.