The finance minister, Nirmala Sitharaman, presented the EU budget for 2019-20 and said that business establishments with an annual turnover of more than Rs 50 crore cannot impose costs on customers who use digital payments.
Photo for representation, (Image: Reuters)
New Delhi: In an effort to promote cashless transactions, the government said Friday that companies with an annual turnover of more than Rs 50 crore can offer cheap digital payment methods and that no cost or trade discount (MDR) is imposed on them or their customers.
The finance minister, Nirmala Sitharaman, presented the EU budget for 2019-20 and also said that two percent tax deducted at source (TDS) will be charged on cash withdrawals that exceed Rs 1 crore in a year from a bank account to discourage the practice of business payments in cash.
"… suggest that business establishments with an annual turnover of more than Rs 50 crore will offer such cheap digital payment methods to their customers and that no costs or MDR will be imposed on both customers and merchants," she said.
The finance minister said the Reserve Bank of India (RBI) and banks will include these costs from the savings that will accrue to them as a result of handling less cash while people switch to these digital payment methods.
MDR is a charge that is levied to facilitate a digital transaction and is generally distributed among different parties. "Necessary changes are made to the Income Tax Act and the Payments and Settlement Systems Act, 2007 to implement these provisions," she noted.
Sitharaman said there are several affordable digital payment methods available such as OHIM UPI, UPI QR code, Aadhaar Pay, certain payment cards, NEFT and RTGS that can be used to promote less cash economy.
She added that the government has taken a number of initiatives in the recent past to encourage digital payments and a less-money economy. "To further promote digital payments, I propose to take a whole series of measures. To discourage the practice of making business payments in cash, I propose to levy 2 percent TDS on cash withdrawals of more than Rs 1 crore in a year from a bank account, "she said.
(With PTI inputs)
. (tagsToTranslate) budget 2019 (t) Digital payment (t) discount (t) Discount on traders (t) Nirmala Sitharaman (t) rbi (t) Reserve bank of India (t) trade union budget 2019