Union Ministry of Finance issued Draft Proposals for Facilitating Electronic Transactions
The proposals are aimed at building a transactions history of an individual to enable improved credit access and financial inclusion, reduce tax avoidance and check counterfeiting of currency
Union Ministry of Finance on 22 June 2015 issued draft proposals for facilitating electronic transactions in the country. E-transactions mean authorization of transfer of money through electronic means and flow of funds directly from one account to another.
The goal of the proposed policy is to provide the necessary incentives to use E-transactions to replace the use of cash - either in government transactions, or in regular commerce over a period of time through policy intervention.
Key highlights of the Draft Proposal
- It aims to build a transactions history to enable improved credit access and financial inclusion
- It seeks to encourage Government, Corporates, Institutions and merchant establishments to facilitate non cash payments
- 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 percent of the billed amount if the payment is done through electronic mode
- It envisages adoption national E-payment gateway PayGov India for collection of revenue, fee, penalties etc.
- 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% value of the transactions is through electronic means.
- It proposes to levy a nominal cash handling charge on transactions greater than a specified level.
- It also proposes to mandate that settling of high value transactions of, say, more than 1 lakh rupees could only be done through electronic means.
- To facilitate high value transactions by a credit cardholder, the ceiling of 2 lakhs rupees could be increased to say 5 lakhs rupees or more.
- It proposes to improve broad band connectivity to enable mobile based payments on a wider scale
Union Finance Minister Arun Jaitley in his budget speech for the Union Budget 2015 - 16 had called for incentivizing credit or debit card transactions and disincentivizing cash transaction so as to curb the flow of black money.
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