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Chief ministers' panel on digital economy suggests taxing cash transactions over Rs 50K

The panel led by Andhra CM also suggested a subsidy of Rs 1000 to non-income tax assesses to buy smartphones among other measures.

Published: 24th January 2017 10:20 PM  |   Last Updated: 24th January 2017 10:25 PM   |  A+A-

Reuters image used for representational purpose

By Express News Service

NEW DELHI With a few days to go for the unveiling of the Union Budget, the chief ministers' panel headed by the Andhra Pradesh CM Chandrababu Naidu on promotion of digital economy suggested a slew of measures, including taxing cash transactions over Rs 50,000 and a subsidy of Rs 1000 to non-income tax assesses to buy smartphones, besides abolition of MDR on lower value of transactions.

Naidu has said that the panel would submit its interim report to Prime Minister Narendra Modi. Sources said that the recommendations of the panel would be given top priority by the Union Finance Minister Arun Jaitley for consideration to include suggestions in the Budget.

"Mobile-based USSD using aadhar number will start by month end by NPCI.  Relief in prospective taxes for encouraging merchant to accept digital payment and no retrospective taxation to merchants are among the suggestions of the CMs' panel," said a senior official, while adding that the tax incentives would be extended to merchants using the biometric sensors. He added that the panel has also argued for tax refund for consumers using digital payment, besides extending 50 percent subsidy to all merchant points for aadhar-enabled biometric payment system.

"The panel is also of the view that a subsidy of Rs 1000 be extended to buy smartphones for non-income tax assesses or small merchants. It has also suggested that the government should provide infrastructure to 154000 post offices for cashless transactions, besides promoting contactless payment for travelling modes," added the official.

The panel has.also suggested that Aadhar be made primary KYC in banks. " The panel has also suggested that in a bid to curb use of cash for large transaction the government should consider levy of banking cash transaction tax on transaction of Rs 50000 and above.

It has also suggested that the government should consider a cap on minimum allowable limit of cash in all type of large ticket size transactions. Also all government sectors like insurance, education institutions, fertilisers, petroleum etc should switch to digital payment modes," said the official.



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