Tax on withdrawal of money gets flak

From "impractical" to "ludicrous" were some of the adjectives used by the captains of industry and bankers to describe the budget proposal to levy 0.1% tax on withdrawals of more than Rs 10,000 from a bank in
a day.

CII president Sunil Kant Munjal said it was not uncommon for people to withdraw Rs 10,000 or more at one go from their bank accounts for their household expenses, and to tax the same was an impractical proposition.

"It is not at all practical. This needs to be looked at and made more practical," he said.

Anand Mahindra, MD of Mahindra & Mahindra, lashed out at the budget proposal saying "It is ludicrous. You must have heard the noise in parliament as the finance minister made the announcment. There is going to be a lot of emotional ruckus on it and people are going to say, 'It is my money'. This won't work."

Naina Lal Kidwai of HSBC Bank termed the idea an "administrative nightmare" for a bank and said it could make people take their money away from the banks.

"If you want to discourage black money, you should hit at the source of the generation of this money. This move could lead to the parallel economy that exists as an alternative to banks," the banker said.