The Finance Ministry has prepared a draft proposal, declaring several incentives for those who go cashless, carrying out transactions using their debit or credit cards.
And going by the proposal of the ministry, it doesn’t appear to be a bad bet to do away with frequent ATM visits and carrying bulkier wallets.
While the government has taken care of the consumers while preparing the draft proposal, it has also included incentives aimed at encouraging merchants to move towards acceptance of cashless payment mode.
While the proposal bats for income tax benefits for those who pay through cards, it also talks about giving tax benefits to merchants for accepting card payment.
According to the draft proposal available on the Union Finance Ministry website, “Tax benefits could be provided to merchants for accepting electronic payments, e.g. an appropriate tax rebate can be extended to a merchant if at least say 50 per cent value of the transactions is through electronic means. Alternatively, 1-2 per cent reduction in value added tax could be considered on all electronic transactions by the merchants.”
In another benefit for them, the government is also looking at reduction in the Merchant Discount Rate, which is the rate charged to a merchant by a bank for providing debit and credit card services.