Taxing cash transactions above Rs 50,000 is in limbo
New Delhi : The Finance Ministry on Wednesday clarified that a final call on the recommendations of the panel of Chief Ministers, which includes a tax on cash transactions above Rs 50,000, is yet to be made.
"The recommendations of the committee (on digital payments, headed by Andhra Pradesh Chief Minister N. Chandrababu Naidu) will be carefully examined and appropriate decisions will be taken in due course," the ministry said.
"The committee has submitted an interim report to the government. The government has not yet taken any final view on the recommendations of the committee."
The panel said the government must tax cash transactions above Rs 50,000, abolish banks' interest on credit card transactions, give tax refund to consumers on digital payments and extend Rs 1,000 subsidy on smart phones to non income-tax payees to promote a less-cash digital economy.
The report was submitted to Prime Minister Narendra Modi on Tuesday.
The high-powered panel was asked to suggest measures to enable all sections of the population to migrate to digital payments, and recommend measures to leapfrog to the advanced digital payment systems of global standards.
It was constituted on November 30 last year after the government demonetised Rs 500 and Rs 1,000 notes.
"To curb use of cash for large transactions consider a levy of banking cash transaction tax on transactions of Rs 50,000 and above. Consider a cap on maximum allowable limit of cash in all types of large size transactions," it said among its various recommendations.