- Rs 50,000+ Cash Withdrawal Can Be Taxed From Now On; Rs 1000 Subsidy For Buying SmartPhones Proposed
Rs 50,000+ Cash Withdrawal Can Be Taxed From Now On; Rs 1000 Subsidy For Buying SmartPhones Proposed
A day before Republic Day and a week before the presentation of Union Budget, a powerful panel comprising of Chief Ministers of India have suggested strong proposals, which, implemented, can have a long-term implication on the Digital India and Cashless movement.
The suggestions have been presented by Andhra CM N Chandrababu Naidu, who led the panel during discussions and brainstorming.
Two of the biggest and most hard-hitting proposals are:
Tax on Cash Withdrawal Of Rs 50,000 And More
The CM’s panel has strongly recommended that cash withdrawal beyond a limit should be completely banned, and at the same time, cash withdrawal above Rs 50,000 should be taxed. As per the suggestions of the panel, such a decision will discourage cash transactions, and would push the general public and business men towards a cashless economy.
The threshold of cash withdrawal hasn’t been revealed, but as per sources, Govt. is considering the proposals.
CM Naidu said, “Bringing down cost of digital transactions is key to success of digital payments. We have recommended levy of banking cash transaction Tax (BCTT) on transactions of Rs 50,000 and above to curb use of cash for large transactions,”
Besides, the panel has also recommended abolition of all additional surcharges and fees for digital payments, and to make them equal with any cash transaction. This can be another major step towards pushing for a cashless economy.
Subsidy for Buying Smartphones
As we experienced first hand in the past, the biggest problem for spreading the the digital economy and for encouraging a cashless economy is the very medium through which it will happen: smartphones and internet penetration.
Out of a population of 120 crore, only 30 crore Indians have a smartphone, as per latest IDC figures. This means that crores of people are still without a smartphone, and if this is the case, then how will Digital India and cashless work?
Understanding this fundamental issue, the panel has suggested that Govt. should provide a subsidy of Rs 1000 to every small businessman, trader who is not covered under tax regime.
This will help the small merchants and traders to adapt cashless economy, and easily transact digitally.
Some of the other suggestions made by the CM’s panel are:
All Govt. subsidies for insurance, educational institutes, fertilizers, PDS, Petroleum should be provided digitally
Extensive tax benefits for micro-ATMs
Promoting Aadhaar-Enabled Payment System (AEPS)
Tax benefits for those, who pay digitally
The CM’s Panel consisted of 13 Chief Ministers.