The government today proposed income tax benefits for individuals making payment through debit or credit cards, NDTV reports.

The move is aimed at curbing the flow of black money and discouraging transactions in cash. "Tax benefits in terms of income tax rebates to be considered to consumers for paying a certain proportion of their expenditure through electronic means," the finance ministry's proposal said.

Finance Minister Arun Jaitley in his Budget speech had said that "one way to curb the on flow of black money is to discourage transactions in cash." The proposals also mandated settling of high value transactions of more than Rs 1 lakh, only by electronic means.