Date:03/11/2005 URL: http://www.thehindubusinessline.com/2005/11/03/stories/2005110300681002.htm

Back Checking tax evasion

The refers to the Finance Ministry decision to use the database on financial transactions to search out tax-evaders.

Since currency is the oxygen for black-money, the most effective way of tackling tax-evasion is to transform currency-circulation into banking transactions.

All sale-purchase exceeding, say, Rs 20,000 must be made through banks. On cash payments, a currency tax at 30 per cent may be imposed.

Drafts/pay-orders/traveller cheques must carry names and address/account numbers of purchasers with reduced validity period of say 45 days to check their misuse as benami drafts for carriers of black-money.

Payments to utilities for water, telephone, electricity and municipal taxes exceeding Rs 1000 must by cheques/drafts only. Use of credit/debit-cards must not be discouraged by imposing special tax on purchases made through them.

Subhash C. Agrawal

Delhi

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