Niti Aayog proposal to give tax breaks on cashless payments while charging surcharge on cash payments:
Niti-Aayog has proposed giving tax breaks to consumers and merchants for debit or credit card payments. The government think-tank has also suggested levying surcharge for cash transactions beyond a set limit to encourage electronic transactions.
The government think-tank has also pitched for stronger policy for protection of interests of online shoppers. It was pointed out that existing legislation does not recognise e-commerce consumers and recommended early enactment of Consumer Protection Bill 2005 introduced in Lok Sabha and updating National Consumer Helpline regularly for e-commerce complaints.
It has also been recommended that mobile wallets be allowed to participate in one of the government’s key reforms – Direct Benefit Transfer Scheme – for subsidies, minimum wage payments for various government schemes and other payments, using JanDhan, Aadhaar and Mobile (JAM).
The purpose of the proposed move is to encourage the digital payments and a way forward to cashless economy.
Similar Instance adopted in other nations:
In South Korea, the government promoted electronic payments by providing tax breaks for both shoppers and merchants on card transactions.