Government Proposes Tax Benefits for Debit Credit Card Online Payments
In order to increase the cashless culture in the rising economy, the Indian Government has proposed that those transacting from Debit and Credit cards would get income tax benefits. This move comes from government after the ministry’s intention to promote cashless facilities.
There is another intention to this proposal. A lot of black money transaction happens through cash payment process and with cashless facility being implemented due to tax benefits, black money transactions would be curbed to a greater extent.
If the proposal is accepted, it would also benefit payers in a way that they would no more have to pay the transaction charges at gas agencies, petrol pumps and for railway tickets at various locations.
This proposal would work on the basis of a certain money to be transacted through plastic mode in order to avail the income tax benefits. This would somewhat set the minimum limit of plastic money transaction to Rs 1 lakh.
This proposal would not only benefit the payer or the consumer but also the merchant in several ways, if they are going to accept electronic payments from their customers. For example, a substantial tax benefit would be given to a merchant if they transact at least fifty per cent of their transactions through electronic payment.
The Finance Minister Arun Jaitley conveyed in his budget speech that one of the means to curb black money is to make electronic money a channel of transaction and discourage the cash payment facilities. The Ministry of Finance has already invited rational comments on their proposal latest by 29th June 2015. Anyone who wishes to comment on this proposal may do so by visiting www.mygov.in.
The government would make certain more customer redressel mechanism in order to avoid possible fraud from the transaction system. If any fraudulent transaction happens, the money in case of electronic payment would be credit back to the payer and it would be subsequently blocked.
With such move coming from the Government of India, we may hope for a time when we do not have to carry cash every time we set out of our house. Electronic payment is an excellent mode of payment, provided there is not surcharge or fee levied on it by the merchant.