What is Legal Tender Money?

The

meaning of legal tender money is

the type of currency that is recognized by a government as acceptable for settling financial transactions. It is legally required to be accepted as a means of payment for goods, services, and debts within the country’s jurisdiction.

In India, the legal tender money consists of the Indian Rupee (INR). It is issued and regulated by the Reserve Bank of India (RBI).

What is limited legal tender money?

• It refers to specific denominations of currency notes and coins that are legally recognised for use in transactions. Their acceptance is restricted or limited in certain circumstances.

• It is used for small denominations. It is accepted without question for day-to-day transactions.

• It can be exchanged for other denominations or deposited in banks.

Unlimited Legal Tender

Meaning

:

• It refers to currency notes and coins that have unrestricted acceptance in all transactions.

• The denominations issued by the RBI are considered unlimited legal tender.

• It is accepted by banks and financial institutions for deposits, withdrawals, and all forms of financial transactions.

This is the

meaning of legal tender money.

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I am an economics major, so I can tell you what is legal tender money.

I want you to know that legal tender money refers to anything recognized by law as a means to settle a private or public debt or meet a financial obligation, including contracts, tax payments, and damages or legal fines. Legal tender money is also known as fiat money. The national currency is legal tender in almost all countries.

The government and the RBI issue legal tender money in the form of coins or currency notes. When this legal tender status is withdrawn, the process is referred to as demonetization.

• Currency notes in denominations of Rs. 2,000, Rs. 500, Rs. 100, Rs. 50, Rs. 20, Rs. 10, and Rs. 5, are presently in circulation.

• Moreover, coins with denominations of Rs. 20, Rs. 10, Rs 5, Rs. 2, and Rs. 1 in a variety of designs, themes, and sizes are in circulation.

Meanwhile, some currencies, generally the US dollar, are considered legal tender in countries that don’t issue their own currency.

For instance, Ecuador has been accepting the US dollar as legal tender since 2000 as it doesn’t have its own currency.

• This type of legal tender money can be used to pay off any amount of debt.

• A person can face legal action if they refuse to accept this money.

• Paper currency/notes are unlimited legal tender in India.

• You can use this type of legal tender money to pay off a debt up to a specific amount, after which the other person can refuse to accept this money. They won’t even face any legal action for this.

• Coins are only limited legal tender in India.

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I hope you liked my answer on what is legal tender money.