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Saturday , 16 December 2017
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Cash withdrawals of and above Rs 50,000 could be taxed

Aiming to incentivize digital transactions, the high-level committee of state chief ministers, led by Chandrababu Naidu, has recommended a banking cash transaction tax (BCTT) on transactions of Rs 50,000 and above. Post demonetization of Rs 500 and Rs 1000 currency notes, there has been a surge in digital payments in the country. The government wants this trend to continue and it is with this same objective that the BCTT has been proposed.

cash

The committee has also recommended a complete abolition of charges on card payments to encourage digital transactions. After submitting the committee’s interim report to Prime Minister Narendra Modi, Chandrababu Naidu held a press briefing, where he said, “We are confident that our recommendations will be incorporated in the Budget.” “We have given our recommendations. It is now up to the government and RBI to assess and implement them,” Naidu said.

The committee has also recommended a cap on large cash transactions, but a limit for the same has not been defined. The panel also wants the abolition of merchant discount rate (MDR), the charge levied on transactions.

It may be recalled that the plan to tax cash withdrawals was first proposed by the UPA government. However, at that time, the digital infrastructure was not fully developed, due to which the plan was shelved.

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