Budget 2016: Tax benefits for debit/credit users; Finance Ministry prepares draft to promote electronic transaction

According to figures released by Confederation of All India Traders (CAIT), only 5 per cent of transactions in India are carried out through the use of plastic money.

Written by: Mohammed Uzair Shaikh

Updated: February 29, 2016, 10:52 AM IST

https://www.india.com/business/budget-2016-tax-benefits-for-debitcredit-users-finance-ministry-prepares-draft-to-promote-electronic-transaction-969361/

Budget 2016: Tax benefits for debit/credit users; Finance Ministry prepares draft to promote electronic transaction

New Delhi, Feb 22: Government is set to undertake a series of measures to promote electronic transaction in the nation. In the upcoming budget, Finance Ministry is set to offer tax rebates to debit and credit card users. The steps are part of Prime Minister Narendra Modi’s vision of ‘Digital India’, where transactions take place in a convenient and transparent manner. The use of plastic money will also curb the flow of black money. (ALSO READ: Union Budget 2016 Live Streaming: Watch Arun Jaitley presenting Budget Speech in Lok Sabha)

According to figures released by Confederation of All India Traders (CAIT), only 5 per cent of transactions in India are carried out through the use of plastic money. CAIT has also recommended Finance Minister Arun Jaitley to take constructive measures promoting electronic transaction in the nation. (ALSO READ: Union Budget 2016 Live News Updates of Arun Jaitley’s Speech in Parliament: Finance Ministry reaches Lok Sabha)

Finance Ministry has prepared a draft document including steps which should be incorporated to induce people towards electronic transaction. Following are some of the benefits which would be granted to debit/card users:

– No more convenience fee to be charged by the Government: Finance Ministry is likely to scrap the convenience fee charged by Government on various payments and utilities.

– Mobile payment costs through netbanking is likely to be reduced. This would induce many of the urban prepaid and postpaid mobile users to clear their bills and top-up their cards.

– 50 per cent reduction in merchant tax is is proposed in the draft document. The tax rebate of 50 per cent would only be extended if the merchant carries out more than 50 per cent of his transaction online.

– Unstructured Supplementary Service Data (USSD) cost currently charged at Rs 1.50 per transaction is likely to be scrapped. Telecom companies are expected do away with this surcharge levelled against consumers who make payments via online.