The Union Budget today proposed to levy TDS of 2 per cent on cash withdrawal exceeding Rs. 1 crore in a year from a bank account. This is in continuation of a number of initiatives taken in the recent past for the promotion of digital payments and less cash economy, and to promote digital payments further, said the Minister.
The low-cost digital modes of payment such as BHIM UPI, UPI-QR Code, Aadhaar Pay, certain Debit cards, NEFT, RTGS etc. will promote the less-cash economy.
The Finance Minister proposed that the business establishments with an annual turnover of more than Rs. 50 crore shall offer such low-cost digital modes of payment to their customers and no charges or Merchant Discount Rate (MDR) shall be imposed on customers as well as merchants.
She added, “RBI and Banks will absorb these costs from the savings that will accrue to them on account of handling less cash as people move to these digital modes of payment”.
