Using your digital wallet for payment as well as swiping debit/credit cards can now become a saviour for you as it can now save you from taxes. The government may soon announce tax benefits from digital transactions in the upcoming budget after the Payments Council of India (PCI) recommended for it.
- According to industry sources, merchants and consumers both will get major incentives from government for digital transactions in this year’s Budget.
- The motive is to provide incentives to market players to operate payment gateways systems as well as simultaneously to ensure capital for investment in developing solutions like this in the future.
- The union government has said that merchants those have their 50% transactions done digitally either can be eligible for a tax rebate or can get 1-2% reduction in the VAT (Value Added Tax) on all electronic transactions. Consumers on the other hand, can as well be eligible for income tax rebates if they are able to produce proof of certain portion of their total expenses were made digitally.
- The central government also plans to get rid of the convenience fee that is charged for online bill payments.
According to many industry sources, incentivizing may help India achieve the success of becoming a digital society from a cash-heavy society.