No tax on card transactions upto 2,000

The government has decided to “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,” sources said. A notification to this effect will be tabled by finance minister Arun Jaitley in Parliament. Following demonetisation of old high value notes, there has been a cash crunch in the country as people have been making a beeline for banks and ATMs to withdraw new currency. The government has been taking steps to promote cashless or digital transactions to take India towards a less-cash economy. Recently, the government asked banks to install additional 10 lakh PoS terminals by March 31 in different parts of the country. The service tax notification of June 2012 will be amended to include exemption on credit and debit cards, the sources added. Meanwhile, Arun Jaitley on Thursday announced that railway bookings made online will come with free insurance. He also announced 0.75 per cent discount on purchase of fuel on digital mode.