Indian Government To Promote Plastic Money


Bangalore: In a country like India, corruption is always been in the spot light. Be it in common wealth games or the 2G scam we have seen it enough. Even, Anna hazare’s protest went in vain to curb it. Now, Modi Sarkar is playing smarter and taking things to another level by giving more importance to plastic cash. This policy might benefit the Indian government.

According to the new government policy, the Finance Ministry proposed a draft, which states that the transactions which are done by debit/credit cards will have tax benefits such as an appropriate tax refund or 1-2percent of reduction. This is a new venture from the government to reduce the tax avoidance.

Finance Minister Arun Jaitely said "One way to curb the flow of black money is to discourage transactions in cash. Now that a majority of Indians has, or can have, a RUPAY debit card, I therefore, propose to introduce soon several measures that will incentivize credit or debit card transactions and disincentives cash transactions,” reports The Economic Times.

This draft states the benefits for the merchants as well as the customers. Instead of various tax charges, it provides an incentive for e-transactions. In order to promote the usage of e-transactions, the draft suggests rationalization of the Merchant Discount Rate (MDR), which is 0.75 percent at present on Debit Card transactions of up to 2, 000 and 1 percent on all transactions above it.

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