The finance minister will table a bill in Parliament to waive service tax on debit and credit card transactions of up to Rs 2,000.
The move comes after the government reviewed the situation post demonetisation of 500 and 1,000 rupee notes and decided to encourage digital payments. Cash crunch have forced people to make a beeline for banks and ATMs to withdraw new currency.
As of October 2015, there were 61.5 crore debit card users and 2.3 crore credit card holders in the country.
Recently, the government asked banks to install additional 10 lakh PoS terminals by March 31 in different parts of the country.