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Beware: Government may impose tax on all the cash you hold

Beware: Government may impose tax on all the cash you hold


In a bid to encourage cashless economy, the government might impose tax on the every cash transaction you do in the coming future. The announcement may come in the upcoming Union Budget on February 1.

The government is working on to prepare strength and weaknesses of the proposal. If required existing rules for banking cash transaction tax may be tweaked, which will also put certain cap on withdrawals from the banks, a bank employee privy to the deliberations said.

"A number of steps are under discussion," the official said.

Since demonetisation on November 8th, the government has taken various steps in regard to encourage cashless economy. The government has also announced various incentives for making digital transactions.

Going by recommendation by the Special Investigation Team (SIT) on black money, the government should ban all transactions above Rs 3 lakh and individuals should be banned to hold over Rs 15 lakh.

Digital payments transactions in December last year were 43% higher than in November and totalled 958 million, RBI data stated. 

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