Government planning to encourage use of plastic money with an aim to keep a check on black money
The government has proposed income tax benefits for individuals making payment through debit or credit cards. The move is aimed at encouraging non-cash transactions and curbing the flow of black money. In a draft paper for moving towards cashless economy and reduce tax avoidance, the government also proposed to make it mandatory to settle high-value transactions of more than Rs 1 lakh through electronic mode.
To encourage electronic transactions, the government also proposed new redressal mechanisms in cases of fraud. “In case of a fraudulent transaction, the money will be credited back to customer’s account and blocked and subsequently released after the investigation is complete/ limited to say a maximum of 3 months,” the proposal said.
In order to incentivise shopkeepers, it 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,” said that draft proposals for facilitating electronic transactions on which the government has invited comments on www.mygov.in. till June 29.