BUSINESS

Govt Plays Down Reports Of Tax On Cash Transactions Over ₹50,000, ₹1,000 Subsidy On Smartphone Purchases

These recommendations have been made from a Centre-appointed panel of chief ministers.

25/01/2017 4:08 PM IST | Updated 25/01/2017 5:37 PM IST
Getty Images/iStockphoto

The government should tax cash transactions over ₹50,000, and provide ₹1,000 in subsidy for smartphone purchases. These are among the recommendations from a Centre-appointed panel of chief ministers who are advising the government on digital payments.

However, on Wednesday, the government clarified in a press note that no "final decision" has been taken on these recommendations. The 13-member committee, headed by Chandrababu Naidu, has submitted an interim report suggesting measures for implementation of digital payment systems.

On Tuesday, the committee submitted its proposals amid recent reports that a cap on cash transactions and cash holdings was under consideration.

According to media reports, other recommendations from the committee include:

  • The need to strengthen cyber security for digital payments
  • Boost infrastructure and educate people to hep increase the adoption of digital payments.
  • Cancel 'merchant discount rates' -- these are charges that are levied by banks on merchants for debit and credit card transactions.
  • Tax incentives for domestic production of micro ATMs
  • Subsidy for merchants who use Aadhaar Pay using biometrics
  • Equip over 1.5 lakh post offices to have the infrastructure to support Aadhaar-enabled micro ATMs and other payment systems.

Naidu has claimed that an increase in volume of digital transitions would help reduce cost of printing physical currency. It's unclear if those costs would still be lower if the committee's recommendations aren't accepted.

India is making a big push towards digital payments in the wake of scrapping legal tenders of Rs 500 and Rs 1,000 notes.

More On This Topic