The Centre’s plan to waive the convenience fee charged for paying utility bills, booking rail tickets online and for payments at petrol pumps through debit and credit cards moved a step ahead with the Finance Ministry readying a Cabinet note on it.

Following up on Finance Minister Arun Jaitley’s Budget announcement to incentivise electronic payments, mobile wallets and debit and credit card transactions to check black money generation, the Ministry had in June last year put out in the public domain for comment a draft proposal.

“Based on the public response and the draft guidelines, we have finalised the proposal to incentivise debit and credit card and other forms of electronic payments. It will be taken up to the Cabinet soon,” said an official familiar with the development.

Besides removing convenience fees and surcharges on electronic payments, consumers are likely to get income tax rebates if they make the bulk of their payments online or through plastic currency. Sources said similar tax benefits would be provided to merchant outlets that encourage credit and debit card transactions though a cut in the value-added tax rate, as originally proposed, may be difficult given that it is a state levy.

Reporting limit

Further, the Centre also plans to double the reporting limit for annual information returns by banks to ₹4 lakh.

The sources said government departments and ministries too would be mandated to make all payments electronically.

While some of the changes would come into effect following approval by the Cabinet, the official said that measures relating to taxation would be implemented after Budget 2016-17 makes amendments to tax laws.

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