Over 1.75 lakh entities withdrew more than Rs 1 crore in cash in 2017-18 adding up to Rs 11 lakh crore

More than 1.75 lakh entities withdrew more than Rs 1 crore each from their bank accounts in 2017-18. The total amount added up to Rs 11 lakh crore, which led the government to impose checks for reduction in cash transactions, especially since the government is trying its best to give a push to digital transactions in the country.

Some withdrawals were for business needs including by cash management companies that manage ATMs, while some withdrawals in 2017-18 are believed to be for illicit purposes. In a lot of cases the PAN card that was furnished was incorrect, while in some case it was not shared at all.

In the Union Budget 2019, Finance Minister Nirmala Sitharaman elaborated that there will be a tax of 2 per cent at source for such withdrawals. The government hopes to improve tracking of entities as they will have to provide the correct PAN to adjust claim at the time of payment of advance tax.

According to a report in Times of India, sources mentioned to the daily that there were more than one lakh PAN holders who withdrew Rs 1-2 crore cash during 2017-18. There were close to 500 entities that took out over Rs 100 crore from their accounts.

The government collects data on all current accounts that have an annual cash withdrawal of Rs 50 lakh or more. Some savings bank accounts are also reported by the banks.

FM Sitharaman had also proposed that entities with annual turnover of more than Rs 50 crore provide digital payment tools  such as QR code-based UPI, credit cards, NEFT and RTGS. NEFT and RTGS transactions have also been made free, with no additional charges levied.

(Edited by Anwesha Madhukalya)

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