Can merchants refuse cash as payment in India in favour of digital modes of payment?

2 Answers 2


Broadly No. The Rupee is a legal tender and no one can refuse to accept.

However there are several norms mostly from Income Tax India to curb black money and there are certain type of transactions or amounts that can't be done in cash.

Further as part of reporting, every company must report any cash transaction in excess of Rs 50,000 and complete the KYC norms of a customer; i.e. get his PAN card and other details before accepting cash.

  • No ability for a merchant to post “credit/debit only, No cash”? Commented Jul 13, 2018 at 11:52
  • 1
    Yes and No. For example in certain PSU or Government fees one can only pay by card or Bankers Cheque. These are by exceptions. There are some who do this in round about way. i.e. Schools / colleges will direct you to a specific Branch where you can deposit cash and get the receipt; but you can directly pay at School / College via card / cheque.
    – Dheer
    Commented Jul 13, 2018 at 12:04

Can merchants refuse cash as payment in India?


"Legal Tender" only applies to debts, not to offers.

In "All you wanted to know about legal tender" The Hindu BusinessLine says:

‘Legal tender’ is the money that is recognised by the law of the land, as valid for payment of debt. It must be accepted for discharge of debt.

A merchant is under no obligation to offer to sell you something in exchange for cash. They can offer to sell for seashells and if you don't like their offer, and they don't accept your counter offer, you must walk away without making a purchase.

If you eat at a restaurant where they present the bill afterwards, at that point you have established a debt. In this case the merchant must accept cash in payment of that debt. Even so, you must offer cash in reasonable denominations, you can't just dump a truckload of tiny coins on the floor.

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