Legal tender or forced tender is payment that, by law, cannot be refused in settlement of a debt denominated in the same currency.Legal tender is a status which may be conferred on certain examples of money, which may depend on circumstances including the amount of money. The term legal tender does not refer to the money itself.
Legal tender is a concept that is frequently misunderstood: this is often a result of differing legal definitions in different jurisdictions. Cheques, credit cards, debit cards and similar non-cash methods of payment are not generally defined as legal tender. Only specific coin and note examples of cash money are usually defined as legal tender. Some jurisdictions may, by law, forbid or otherwise restrict payment made other than by legal tender. For example, such a law might outlaw the use of foreign coins and bank notes, or require a license to perform financial transactions in a foreign currency.
In some jurisdictions legal tender can be refused as payment if no debt exists prior to the time of payment (for example, where the obligation to pay arises substantially contemporaneously with the offer of payment). Consequently vending machines and transport staff do not have to accept the largest denomination of banknote for a single bus fare or bar of chocolate, and even shopkeepers can reject large banknotes — this is covered by the legal concept known as invitation to treat. However, restaurants that do not collect money until after a meal is served would have to accept that legal tender for payment of the debt incurred in purchasing the meal.
The right, in many jurisdictions, of a trader to refuse to do business with any person means a purchaser cannot demand to make a purchase, and so declaring a legal tender other than for debts would not be effective.
Tender in India
The Indian rupee is the only legal tender in India. The rupee is also legal tender in Nepal and Bhutan. But Nepali Rupee and Bhutanese Ngultrum are not legal tender in India.The Indian National Rupee is not accepted in Government institutions like Post Offices etc in Nepal and Bhutan.