No Service Tax on Debit, Credit Card Transactions upto Rs.2000
Tax Break On Payments Upto Rs. 2,000 If You Use Card, Not Cash. Govt to waive service tax on card transactions up to Rs 2,000 is the biggest news of the day. Starting today, you will not be charged any service tax when you use your credit or debit card for upto Rs. 2,000. Currently, you pay 15% as the tax on these transactions. The exemption is part of the government’s all-out initiative to steer the country away from a cash economy to digital transactions.
Government will waive service tax on debit and credit card transactions of up to Rs 2,000 in a bid to promote digital transactions amid cash crunch following withdrawal of old Rs 500 and 1,000 banknotes.
Arun Jaitley, finance minister of India, told this in parliament on 08.12.2016.
Why this step:
- To promote cashless or digital transactions.
- To tackle the cash crunch due to demonetisation of Rs.500 & Rs.1000 notes.
Along with this the government asked banks to install additional 10 lakh PoS terminals by March 31 in different parts of the country.
