Zee Media Bureau
New Delhi: The government has proposed income tax benefits for people making payments through credit or debit cards. This move also aims to boost digital payement and encouraging non-cash transactions.
Here are the key points that you need to know.
* High value transactions of more than Rs 1 lakh, may be allowed through electronic means only
* In order to incentivise shopkeepers, the government has proposed tax rebate to them provided they accept a significant value of sales through debit or credit cards.
* Tax benefits in terms of income tax rebates to be considered to consumers for paying a certain proportion of their expenditure through electronic means
* There could also be no transaction charges on card payments at petrol pumps, gas agencies, and for railway tickets.
* The proposals are aimed at building a transactions history of an individual to enable improved credit access and financial inclusion, reduce tax avoidance and check counterfeiting of currency.
* An appropriate tax rebate can be extended to a merchant if at least say 50 per cent value of the transactions is through electronic means. Alternatively, 1-2 per cent reduction in value added tax could be considered on all electronic transactions by the merchants
* The draft also proposes to relax the norms for reporting credit card transactions of individuals by banks.
* At present there are about 56.4 crore debit cards and 11.25 lakh point of sale terminals in India.
* The draft proposals were prepared by the government after consultations with various stakeholders including RBI, NPCI, NIBM, public and private sector banks, card service providers, mobile service providers, research institutions and government departments.
