In a bid to promote cashless economy, the government on Thursday announced that you will not have to pay service tax on debit cards as well as credit cards upto Rs 2000.
Presently, you are being charged 15% tax on these transactions.
“exempt services by an acquiring bank to any person in relation to settlement of an amount up to Rs 2,000 in a single transaction transacted trough credit, debit card or other payment card service”, PTI quoted its sources as saying.
Since the announcement, the central government has been constantly urging people to go cashless in order to boost cashless and digital transactions to make India go completely digital.
The government had recently directed the banks to install additional 10 lakh PoS terminals by March 31 across the nation.
This comes just a month after Prime Minister Narendra Modi announced his decision to demonetise Rs 500 and Rs 1000 notes. He had said that the decision to scrap higher denomination currency has been taken to fight the black money menace. However, the opposition parties trained their guns against the move and have been demanding a roll back since the announcement was made.
The move has also led to massive cash-crunch in the economy with people across the nation making long queues outside the bank just to withdraw cash.