Plastic money is a term used to refer the plastic cards that we use in the substitute of paper notes or bank notes. These cards can range anywhere from credit cards to smart cards to debit cards. Plastic money can help one in settling many payments. The different forms of plastic money include credit cards, debit cards, prepaid cards, store cards and smart cards. These cards have their own features. Let us have a look at all the features of the cards:-
- Cash Cards: This card allows to withdraw money from the bank through the ATM or the Authorised Teller Machine but it does not allow the person to buy anything directly through the card.
- Credit Cards: This card allows the user to withdraw money from the bank as well as allows him or her to purchase stuff directly. It is like a loan for the user which has to be paid as a bill payment issued by the bank.
- Debit Cards: This card allows its user to directly withdraw or debit money from the bank account of the user. This card can be used for direct purchase of things.
- Prepaid cash cards: In these kind of cards the user adds credit to the card himself or herself. These cards can be reused using top ups. Although the gift cards cannot be used again and once they are used they are needed to be thrown off.
- Store Cards: The main ideal of this card is to purchase something in store that is to be billed at the month end. They are limited to only certain places.
So these are the kinds of plastic money that are different in their forms but have one similarity. The similarity is that all of these cards act as substitutes of money.
PLASTIC MONEY HELP IN REDUCING CORRUPTION, FAKE CURRENCY AND TAX EVASION?
Many people have credit and debit cards which they use for their day to day purchases. There is a need to develop technology so that everyone uses this method for money transactions.
Now the question that arises here is that how can plastic money help to reduce corruption?
Yes, plastic money can play a very important and in fact a major role in the eradication of corruption in India. These are the reasons that how are it possible:-
● Every money transfer or transaction is maintained and recorded and also the transactions of crores and crores of money cannot go unrecorded. Each official can have only that much of amount that he earns or has saved through his or her earnings.
● None of the money transactions are illegal. As, all the money transfer and transaction happens through bank accounts, none of the illegal money can be transferred.
● All the conversions of the Indian currency into dollars or swiss dollars are recorded and also their amount is recorded if a lot of money is converted.
● The number of fraudulent money practises are reduced as no fake paper notes can be printed as they are not usable.
● All the transactions will be recorded and also payments made in this manner are billed out in order to maintain a proof of the transaction made. Hence this will eradicate the problem of lack of evidence when it comes to transactions made. Many a times, we do not take a cash memo from the shopkeeper although it is the only record or proof that says that we have purchased an item from that shop.
How does Plastic money help to reduce tax evasion?
Tax evasion refers to not paying taxes. So it is an illegal stuff. It is mainly done by Politicians, big companies and entrepreneurs to make more money that is black money. These rich non-taxpayers need to pay taxes and they don’t do it. So, there needs to be a pressure by which these non-taxpayers can be turned and transformed into regular taxpayers. Plastic money will create such a pressure. Let’s see how?
When money is transacted from one person or an organization to the other using plastic money then it is recorded. Hence when income is received by the person or organization, then that income amount is always recorded. Every time the person or the organization receives any amount of money, it is recorded and so the total income of the person or the organization is known to the income tax office. And the tax that is required to be paid by the person or organization is also calculated and so he or she cannot escape from paying the tax and hence in this manner plastic money creates a pressure on the person or the organization for the prevention of tax evasion.
Although it’s very difficult to make it feasible, we still needs paper notes, but more use of Plastic currency can solve the problem of fake notes, curb political corruption and reduce Tax Evasion.