New Delhi, June 23 (IANS): Welcoming the government's move to give the tax break on credit and debit cards, a mobile payments company on Tuesday said the measure will provide a massive boost to small payment transactions.

"These proposed measures will provide a massive boost to small payment transactions in mass transit and mobile payments. With an increase in transaction points, the consumer will adopt to electronic money in day to day activity and not just for high value purchases," Amrish Rau, managing director of Citrus Payments, said in a statement here.

The government on Monday proposed to do away with transaction charges on card payments at petrol pumps, gas agencies and for railway tickets.

In a circulated draft paper, the finance ministry proposed income tax benefits for people making payments through credit or debit cards and removing transaction charges on purchase of petrol, gas and rail tickets with such cards.

"Tax benefits in terms of income tax rebates to be considered to consumers for paying a certain proportion of their expenditure through electronic means," said the draft proposals on which comments have been invited till June 29.

The government also proposed to make it mandatory to settle high-value transactions of over Rs.1 lakh through the electronic mode.

The proposals are aimed at enabling improved credit access and financial inclusion, reduce tax avoidance and check counterfeiting of currency.

To popularise the use of plastic money, the government launched the RuPay debit card in 2012 through the National Payments Corp of India (NPCI). The card enables electronic payments at all banks and financial institutions, competing with MasterCard, Visa and American Express.