Government Proposes Income Tax Benefits For Payments Through Credit Or Debit Cards
On the other hand, the paper said, "utility service providers could be advised to give a discount to users for small ticket payments through e-payments, on the lines of BSNL, which provides an incentive of 1 per cent of the billed amount if the payment is done through electronic mode".
In order to promote wider adoption of e-transactions, it suggested rationalisation of the Merchant Discount Rate (MDR), which at present is 0.75 per cent on Debit Card transactions of up to Rs 2,000 and 1 per cent on all transactions above it.
"The existing inter-change fee on Debit/Credit Card transactions are not uniform and need to be standardised/ rationalised to encourage both issuing and acquiring banks to establish and utilise acceptance infrastructure," it said.
A nominal cash handling charge on transactions greater than a specified level may be levied, it added.
The draft also proposes to relax the norms for reporting credit card transactions of individuals by banks.
"At present, banks have to report the aggregate of all the payments made by a credit cardholder as one transaction, if such an amount is 
2 lakhs in a year. To facilitate high value transactions, the ceiling of 2 lakhs could be increased to say 5 lakhs or more."
Government departments, it said, should also consider introduction of appropriate acceptance infrastructure or adopt national E-payment gateway 'PayGov India' for collection of revenue, fee and penalties etc.
At present there are about 56.4 crore debit cards and 11.25 lakh point of sale (PoS) terminals in the country.
