What is the difference between limited and unlimited legal tender money?
Limited legal tender money is the money which can be accepted only up to a certain maximum limit. Unlimited legal tender money is the money which a person has to accept without any limit of amount. For example all currency notes and coins of 50 paise are unlimited legal tender money.
What is limited legal tender money?
i) Limited legal tender. It is that money which no person can be forced to accept beyond a certain maximum limit fixed by law. For instance in India, coins are limited legal tender because coins of 5, 10, 20 and 25 paise can be accepted up to maximum sum of र 1000 as per Coinage bill passed on 11th Aug. 2011.
What is legal tender money and unlimited legal tender money?
One can refuse payments in these small coins beyond the sum of Rs 25. 2:Unlimited legal tender money is the money that a person has to accept without any limit of amount. For example, all currency notes and coins of 50 paise are unlimited legal tender money.
Which form of money is limited and unlimited legal tender and why?
In India, coins function as limited legal tender. Therefore, 50 paise coins can be offered as legal tender for dues up to ₹10 and smaller coins for dues up to ₹1. Currency notes are unlimited legal tender and can be offered as payment for dues of any size.
What is limited legal tender money in Pakistan?
Paisa denominated coins ceased to be legal tender in 2013, leaving the ₨. 1/- coin as the minimum legal tender. On 15 October 2015, the Pakistan government introduced a revised ₨. 10/- coin was introduced into circulation. In 2019 the Pakistan government introduced a commemorative ₨.
Why is it called legal tender?
Etymology. The term “legal tender” is from Middle French tendre (verb form), meaning to offer. The Latin root is tendere (to stretch out), and the sense of tender as an offer is related to the etymology of the English word “extend” (to hold outward).
What are M3 and M4 money?
M3 and M4 are known as broad money. These gradations are in decreasing order of liquidity. M1 is most liquid and easiest for transactions whereas M4 is least liquid of all. M3 is the most commonly used measure of money supply.
How many types of legal tender money are there?
The legal tender money is of two types: (i) Limited Legal Tender Money: This is a form of money, which can be paid in discharge of a debt up to a certain limit and beyond this limit, a person may refuse to accept the payment and no legal action can be taken against. Coins are limited legal tender in India.
What are called legal tenders?
Legal tender is anything recognized by law as a means to settle a public or private debt or meet a financial obligation, including tax payments, contracts, and legal fines or damages. A creditor is legally obligated to accept legal tender toward repayment of a debt.
Why is money called legal tender money?
History tells us that ancient humans used salt and spices as currency. But ‘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. Currency notes are unlimited legal tender and can be offered as payment for dues of any size.
What’s the difference between unlimited and limited legal tender?
The legal tender status given by the government to money may be limited or unlimited. i) Limited legal tender. It is that money which no person can be forced to accept beyond a certain maximum limit fixed by law.
Which is the legal tender amount in India?
It is that money which no person can be forced to accept beyond a certain maximum limit fixed by law. For instance in India, coins are limited legal tender because coins of 5, 10, 20 and 25 paise can be accepted up to maximum sum of र 1000 as per Coinage bill passed on 11th Aug. 2011.
Can a person refuse to use a legal tender?
Legal tenders can’t be refused but there are caveats, accordingly they’re subdivided into two parts 1) limited legal tenders such as coins which can’t be used beyond a level for debt-settlement; and 2) unlimited legal tenders e.g. currency.