Narendra Modi-led government on Monday proposed income tax benefits for people making payments through credit cards, debits cards or via any other mode of online transaction. The initiative aims at building transaction history of an individual to enable improved credit access and financial inclusion, reduce tax avoidance and stop counterfeiting of currency.
The e-transactions, according to the draft, will include the ones made through debit/credit cards, mobile wallets, mobile apps, net banking, National Electronic Fund Transfer (NEFT), and other similar modes.
Cutting through the jargon, here is all you need to know in 5 points:
1) No transaction charges will be levied on purchase of petrol, gas and rail tickets with plastic money.
2) Mandatory to settle high value transactions of more than Rs 1 lakh through electronic mode.
3) Tax rebate to shopkeepers if they accept a significant value of sales through debit or credit cards. 1-2% reduction in VAT could be considered on all e-transactions.
4) Utility service providers could be advised to give a discount to users for small ticket payments online like BSNL, which provides an incentive of 1% of the billed amount when payment is made online.
5) Government departments to adopt national E-payment gateway ‘PayGov India’ for collection of revenue, fee, penalties etc.
Read full story here: Govt proposes income tax benefits for credit, debit card payments