The proposed system

1. Abolition of existing taxation system

Complete withdrawal of existing taxation system including Central, State & Local taxes and Duties, except Customs and Import duties.

2. Single tax on every bank transaction (receipt account only)

Every Transaction routed through a bank will attract certain deduction in appropriate percentage as "Transaction-Tax", i.e. Single Point Tax deduction at source. This deduction is to be effected on receiving/credit accounts only.

Further, this deducted amount will be credited to different Government levels like Central, State and Local at equitable share of tax revenue.

In addition to this, Transacting Bank will also have its share in this amount as the bank has a key role to perform. Cash transactions will not attract any transaction tax.

Collection of 2% (notional) tax on every transaction will meet present revenue requirement of the government.

Distribution of 2% (notional) Transaction Tax

3. Currency compression

In a certain time period, currency notes of denomination higher than say Rs. 50/– should be taken off from circulation. The highest denomination of currency thereafter should be Rs. 50/–

4. Cash transaction regulation – legal status to cash transaction to a certain limit (say upto Rs. 2000*)

Ligitimate cash transaction limit is to set to certain amount for a single transaction (say Rs. 2000/–). This also implies that cash transactions below this limit will be tax-free and legal.

* Cash transactions above this limit will not get any legal protection.