The government has done away with the one per cent tax on cash payments of over 2 lakh rupees for purchase of any goods or service after it banned cash dealings above that limit from 1st of April. <br/><br/><br/>The government in the previous Budget had provided for the seller to collect tax at the rate of 1 per cent from the purchaser on sale in cash of any goods or offering any services exceeding 2 lakh rupees.<br/><br/><br/>However, in the Budget 2017-18, presented last month, Finance Minister Arun Jaitley brought in a new provision banning cash transaction above 3 lakh rupees but through an amendment the limit was lowered to two lakh rupees. To reconcile the two provisions, the tax at source on goods and services, including jewellery, has now been removed through an amendment to the Finance Bill, 2017.