 "The data should be deleted from the systems abroad and brought back to India not later than one business day or 24 hours from the payment processing, whichever is earlier, the RBI said")
In a bid to promote cashless transactions, the government on Friday said businesses with annual turnover of over Rs 50 crore can offer low-cost digital modes of payments and no charges or Merchant Discount Rate (MDR) will be imposed on them or their customers.
Presenting the Union Budget for 2019-20, Finance Minister Nirmala Sitharaman also said two per cent tax deducted at source (TDS) will be levied on cash withdrawals exceeding Rs 1 crore in a year from a bank account to discourage the practice of making business payments in cash.
"...propose that the business establishments with annual turnover more than Rs 50 crore shall offer such low-cost digital modes of payment to their customers and no charges or MDR shall be imposed on customers as well as merchants," she said.
The Finance Minister said the Reserve Bank of India (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.
MDR is a charge levied for facilitating a digital transaction and is generally distributed among various parties.
"Necessary amendments are being made in the Income Tax Act and the Payments and Settlement Systems Act, 2007 to give effect to these provisions," she noted.
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Sitharaman said there are several low-cost digital modes of payment available such as BHIM UPI, UPI-QR Code, Aadhaar Pay, certain debit cards, NEFT and RTGS that can be used to promote less-cash economy.
She added that the government has taken a number of initiatives in the recent past to encourage digital payments and less-cash economy.
"To promote digital payments further, I propose to take a slew of measures. To discourage the practice of making business payments in cash, I propose to levy TDS of 2 per cent on cash withdrawal exceeding Rs 1 crore in a year from a bank account," she said.
