Bank Transaction Tax systems BTTS

Bank Transaction Tax systems   BTTS

Nowadays BTT is on discussion mode some body say it’s difficult to exchange it with current tax systems. But here I try to made blue print of BTT.

Everybody now our current tax system so here I am not explain current tax system 

Bank Transaction Tax (BTT) as per first view it’s very difficult because everybody same tax rate for every person and every industry or how can control or manage some harmful industry or very high income person.

But if we see in deeply in our current banking system and if we try to minor changes and manage.

New BTT is divided essentially three parts of tax 

First ---Bank

Second--- Tax Department – Government

Third --- individual/ commercial

Now we should understand of parts of all these three major parties

First party is Bank. Normally Bank are handled or under lows of RBI. Banks haven’t any direct connection with government or tax department. Banks are operating different groups of organization likes as Public sector banks, private sector funds, Co.Op.Banks, international Banks. They have their own Banking facility and operation system

Other things are why should bank collect tax on behalf of government and tax Department. Tax department are responsible for tax collection.

Second government and IT -   government give direction how to collect tax.IT dept. works under government guidelines. Mainly taxes on income/commercial. Taxes also categorized under different kinds purposes

Third party is individual/commercial   its major effects part of taxation system because at end of all taxes on individual. We also define individual and commercial

Individual- Job holder, farmer, workers, small business person

Commercial- ltd. Co, Pvt.ltd.co. Partnership and Individual firm and others

Now we show how revenue system works will!!!!!!!

Mainly all works under IT department because after all IT is responsible for taxation

Banks transaction tax

So here now Banks are most and centre parts of taxation

Banks are operating many different kinds’ accounts for individual as well as commercial so first major changes in Banks because we should divide and define all individual and commercial. Here our aim is maximum define so we should manage all parties and tax payers 

Banks have mainly two types of accounts

Individual Account	Commercial  Account
1             Saving Account 2             Minor/ 60+ age account 3             Salary account 4             Others	1     current account     2     others

These are all types account but here we minor changes in accounting system. Here give one small example to understand batter. How to give unique code to all different kinds of banks account

 Types of Banks account                                                     codes

1)   Individual account                                                            

a.   Saving account –                                     01    

                                         i.    Farmers accounts                                              0101

                                        ii.    Labour accounts                                                0102

                                       iii.    Minor and senior citizen accounts                    0103

                                      iv.    Others account                                                  0104

b.   Salary Accounts                                       02

                                         i.    Low salary Income account                               0201

                                        ii.    Medium salary Income accounts                      0202

                                       iii.    High Salary Income Accounts                          0203

c.   Others individual accounts                      03

2)   Commercial Accounts

a.   Single owner firms                                   11

b.   Partnership firms                                     12                       

                                         i.    Low capital                                                          121

                                        ii.    Medium capital                                                   122

                                       iii.    High capital                                                         123

c.   Ltd Company                                            13

                                         i.    Pvt. Ltd(Separated in sectors wise)       131  

1.   Agro sector                                      1311

2.   Farm Sector                                     1312

3.   Banking Sector                                1313

4.   Others                                              1314

                                        ii.    Ltd. Company                                         132

1.   Heavy metal                                     1321

2.   Others                                              1322

d.   Others                                                        14

Now every bank account number must be start with the above types of unique code no. and each and every account must open with pan card, 

 

IT department

All banks should give detail to IT Department weekly or monthly as per requirements. IT department check account statuses all account have proper unique code or not.

Here tax rate are fix for all unique code

1)   Individual account                                                            

a.   Saving account –                                              

                                         i.    Farmers accounts                                             0.5%

                                        ii.    Labour accounts                                               0.5%

                                       iii.    Minor and senior citizen accounts                   0.5%

                                      iv.    Others account                                                 3%

b.   Salary Accounts                                                

                                         i.    Low salary Income account                              0.5%

                                        ii.    Medium salary Income accounts                     1%

                                       iii.    High Salary Income Accounts                          3%

c.   Others individual accounts                                  3%

2)   Commercial Accounts

a.   Single owner firms                                               2%

b.   Partnership firms                                                                           

                                         i.    Low capital                                                           1%

                                        ii.    Medium capital                                                    2%

                                       iii.    High capital                                                         2%

c.   Ltd Company                                           

                                         i.    Pvt. Ltd(Separated in sectors wise)                

1.   Agro sector                                       1%

2.   Farm Sector                                      1%

3.   Banking Sector                                 3%

4.   Others                                               3%

                                        ii.    Ltd. Company                                

1.   Heavy metal                                      2%

2.   Others                                               2%

d.   Others                                                                  3%

After that they calculate total received money for single pan card holders. For example my pan card no is xxx2345xx   and I have four bank accounts in different banks. IT department merger all my 4 account as per my pan card details than calculate total received money in my account than they deducted money from my bank account as per my pan card or tax payer preferably bank

And IT department give statement to all tax payers weekly or monthly as they deducted tax from tax payer’s accounts

Government role

Government should same as current role

They can decide how much tax for farmers account

How much for particular sector company

Now we have lots questions regards this systems

1)   What about cash deal?

This is big problem due to everybody start cash dealing due to no tax on cash. But there is solution its simple if anybody withdraw more than 10000 cash in one day  from bank they should pay extra tax on it 

If anybody deposits more than 10000 cash in day they should pay extra tax on it

Here come one more argument small business man doing cash business for that kind of case they should advance inform to IT department

2)   What if person gives money to his wife and their parents?

 It’s simple solution they should open sub account or joint account and give extra debit card to them for paying expenses.

I HAVE ALL QUESTION APPROPRIATE SOLUTION

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