Good news for Credit Card and Debit card users. To make the country use cashless economy and boost digital transactions, Government of India today announced that it wouldn’t charge any service tax on credit or debit card transactions up to Rs 2,000.
Currently, we pay 15% as the tax on card transactions, and now you won’t pay service tax for up to Rs 2,000. The government is taking necessary steps over Cashless transactions, and the Government’s latest initiative of exemption of service tax on credit or debit card for up to Rs 2,000 is to boost the country for using digital operations.
The tax break for using cards come exactly a month after Prime Minister Narendra Modi announced the statement of demonetization of currency. He announced the ban of Rs 500 and 1000 notes on November 8.
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Yesterday, the Reserve Bank of India (RBI) clarified that already 11.5 lakh crores ($170 billion) had come to banks through depositing. Central Government is going to modify the June 2012 service tax notification and finance minister Arun Jaitley will submit the information to Parliament.
RBI Monetary Policy Committee had taken this initiative to reduce cash crunch. However, critics of the demonetization drive say this shows that the modification has failed at cracking down on black money.
The ban of the high-denomination notes set off a huge cash crux. The withdrawn bills formed 86 percent of the currency in circulation. The situation was worsened by a lack of new bills through the Government has relieved that conditions will improve by the end of the year. Cash in the banks disappeared within few hours of opening and remain packed with people desperate for currency.
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Yesterday, the RBI unexpectedly didn’t lower its key policy rate. India’s economy grew by an annual 7.3 percent between July and September. RBI on Wednesday proposed a new set of guidelines for those who are doing online transactions. From now onwards, transactions up to Rs 2,000 won’t allow OTP and also announced that it would take some time to take new Rs 500 notes in the market.