New Delhi, Jul 5 : In order to promote digital transactions, the Government on Friday announced 2 per cent TDS on cash withdrawal of more than Rs 1 crore in a year from a bank account.
Business with a turnover of more than Rs 50 crore would offer such low cost digital modes of payment to their customers without any charges, Union Finance Minister Nirmala Sitharaman said while presenting the Budget in Parliament here.
Later in a press conference she said her government was in favour of digital transactions but against the cash withdrawal.
She also announced that the RBI and banks would absorb these costs from the savings that will accrue to them on account of handling less cash.
“Necessary amendments in the Income Tax Act and the Payments and Settlement Systems Act, 2007 are being made,” she added.
Digital payments firms had long been demanding government incentives in the form of tax benefits.(UNI)