30% tax break for digital transactions

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Finance Minister Arun Jaitley on Tuesday said small traders and businesses will get a tax advantage of more than 30 per cent for digital transactions.

The government on Monday said small traders and businesses with a turnover of up to Rs 2 crore would pay less tax if they accept payments through banking and digital means.

“There will be a significant tax benefit for small traders if you turn digital. It is a tax incentive to support digitisation of economy,” Jaitley told the media.

“If we calculate, many traders will get a tax advantage of more than 30 per cent for transactions in digital mode,” he added.

On putting a ceiling of Rs 5,000 on deposit of old notes, Jaitley said: “Since the exemptions on using old notes have been lifted (in hospitals, railway stations and other places), there will be no question of getting old notes on a regular basis.

“Whoever has old currency must go and deposit it in one go. If somebody goes every day, it raises suspicion,” he added.

On the issue of cash shortage, the Finance Minister said the Reserve Bank of India has sufficient stock of cash, which would last way beyond December 30.

“RBI has adequate cash, not only to last till December 30, but well beyond that,” said Jaitley while briefing the media.

On the question of being less prepared, Jaitley said: “There was complete preparation. Not even for a single day did the RBI not release adequate currency stock through the banking system.”

“A certain amount of currencies are to be released each day. There was already preparation for that. Therefore, stock has been maintained, adding both advance printing and current printing,” he added.

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