Cash Transactions Limits: All You Need to Know
Tax breaks in India are a hot-button political problem for at least a decade. In the provision of tax exemption, many Indians kept their money in illegal money accounts. In this context, an investigating team of retired judges appointed by the government recently handed over the fifth place of their reports.
Important recommendation made:
Re-portable suggestions were full. But what the headlines could catch, it was recommended that more than Rs. 300,000 cash transactions were banned, and who should be allowed to keep more than 1.5 million cash in cash? This is nothing but a cashless economy.
What exactly is a cashless economy?
It can be defined as a condition that the cash flow does not exist in the economy and all transactions are directly debunked, credit and debit cards, electronic clearing and payment methods such as Immediate Payment Services (IMPS), National Electronic Fund Transfer and Real Time Gross Settlement in India.
Benefits of cashless economy:
- With the increase of efficiency in the welfare activities, money is directly added to the recipient's account.
- Efficiency profits should also come as the cost of transactions across the economy.
- Reduction of cash will reduce grey economics, prevent money mortgages and even increase tax compliance, which will eventually benefit the customers greatly.
- The use of cashless methods will also ensure that the damage to the public system is flooded, and the intended beneficiaries have been able to benefit from them.
Barriers to cashless transactions:
- Lack of banking access to cash as well as a large portion of the population is available to many.
- A large majority of retailers, suppliers and service providers belong to the unorganized, informal field. They do not have the tendency to encourage consumers through card based transactions or credit cards or debit cards.
- The idea of customers sometimes works a barrier. The benefits of cashless transactions are not even clear to those who have a credit card. On the other hand, 82% of cash card users are considered to be the fastest way of transacting. It is universally believed that having cash helps you to better discuss.
- Most cards and cash users fear that if they use the cards, they will be charged more. In addition, credit card users are not aware of the credit card facility.
How can the situation be improved?
- Jan Dhan accounts through institutional initiatives.
- Setting up a strong payment system to suspend digital transactions.
- Other forms of credit card or digital settlement are used when a service tax waiver is encouraged.
- The Reserve Bank of India will also have to come to terms with a few things, which implies that the various digital finance systems on the border mean that the new methods of payment for money control affect the velocity of money, such as significant mobility.
- Reserve Bank of India has to maintain some of its Conservativeness, which is part of it, because it usually shows itself as a protector of banking interest rather than overall financial development.
- Regulators should be closely monitored on any possible restrictive efforts so that banks can retain their current authority on profitable payments.
As cash is used for less and less transactions, authorities will be easy to rebuke on tax evasion. For this reason, the government works harder to further strengthen this transition compared to the hard work and hard work laws. The best way to get rid of black money is to get rid of the money.