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Expect tax benefits on digital payments in Budget 2017: Dena Bank

As it gears up to launch its mobile wallet next week, state-owned Dena Bank has favoured tax concessions in the upcoming Budget for customers and merchants using digital modes for payment.

Asked about his wishlist for the Budget – to be unveiled on February 1 – Ashwani Kumar, Chairman and Managing Director, Dena Bank told PTI, “We want more tax concessions for customers and shopkeepers who go digital. The incentives can come in the form of income tax, service tax”.

He also pitched for tax concessions for banks with regard to NPA provisioning.

On the bank’s plans for mobile wallet at a time when digital transactions have seen a surge in the aftermath of demonetization, he said, “Our mobile wallets are going to get live in a week’s time. We have a tie up with Jio”.

He said that the Bank has already cut lending rates by 0.75% and further lowering of rates will depends on various factors.

Post demonetization, the Government has been pushing for a less-cash economy and promoting digital transactions in a big way. It has also announced a lottery for people who do transactions through digital modes.

In fact, digital payment channels like mobile wallets, USSD and RuPay have seen massive uptake and rise in transactions post demonetization.

According to government data, the number of USSD transactions saw a whopping 5,135% jump, from 97 such deals a day on November 8 to 5,078 on December 25. The value of transactions on USSD — mobile short code message used mainly for banking services on feature phone — during the same period grew 4,061% from Rs 1 crore a day to Rs 46 crore on December 25.

UPI transactions — which allows users to transfer funds from one bank account to another using a smartphone — grew 1,342%, from 3,721 such transactions a day on November 8 to 53,648 on December 25. In value terms, it grew 647% from Rs 1.93 crore a day to Rs 14 crore in the same period.

On December 30, Prime Minister Narendra Modi launched an indigenous digital payments app BHIM for fast and secure cashless transactions using mobiles. BHIM is a payment platform designed to make UPI and USSD payment modes simpler and usable across feature phones and smart phones.