January 13, 2017
Levying cash tax is one of the measured being considered by the government of India to push digital transactions. A proposal was raised by some lawmakers to levy a tax on cash transactions. If this proposal is cleared, it may be included in budget 2017, to be released on 1st Feb. This proposal is aimed at shrinking the cash economy and encouraging more people to go cashless. At present, the government is considering all the advantages and disadvantages of levying cash tax. If implemented, tax will be levied on all cash withdrawals above a specified limit from bank accounts.
According to data released by the Reserve Bank of India (RBI), total volume of digital payments increased by 43% month-on-month from November to December, 2016 post demonetization. The government intends to further boost cashless transactions by bringing in a range of measures which include discounts for online payments.