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Tax benefits proposed for credit and debit card payment

Sentinel Digital DeskBy : Sentinel Digital Desk

  |  23 Jun 2015 12:00 AM GMT

New Delhi, June 22: The government on Monday proposed to do away with transaction charges on card payments at petrol pumps, gas agencies and for railway tickets.

In a circulated draft paper, the fince ministry proposed income tax benefits for people making payments through credit or debit cards and removing transaction charges on purchase of petrol, gas and rail tickets with such 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,” said the draft proposals on which comments have been invited till June 29.

“An appropriate tax rebate can be extended to a merchant if at least say 50 percent value of the transactions is through electronic means. Altertively, 1-2 percent reduction in value added tax could be considered on all electronic transactions by the merchants,” it added.

The government also proposed to make it mandatory to settle high-value transactions of over Rs.1 lakh through the electronic mode.

“High value transactions of, say, more than Rs.1 lakh only by electronic means,” the draft paper proposed.

The proposals are aimed at ebling improved credit access and fincial inclusion, reduce tax avoidance and check counterfeiting of currency.

Earlier this month, Fince Minister Arun Jaitley pushed for greater use of plastic money.

“The developed world has moved substantially to plastic currency and payment gateways. I think, there is a need on this for India. Our determition is also there to gradually take steps and move in that direction,” the minister said at a conference on Indigenisation of Currency here.

To popularise the use of plastic money, the government launched the RuPay debit card in 2012 through the tiol Payments Corp of India (NPCI). The card ebles electronic payments at all banks and fincial institutions, competing with MasterCard, Visa and American Express. (IANS)

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