Legal Tender

Legal tender refers to the form of money that a country’s laws designate as valid for settling monetary obligations such as debts, taxes, and penalties. Because it is authorised by the government, a creditor cannot refuse it as payment when it is tendered. It typically consists of the nation’s official coins and currency notes, and in certain jurisdictions, specific digital or electronic forms of money may also be recognised.

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For example, if a person in India must pay ₹10,000, they can settle the amount using Indian Rupee notes or coins, and the recipient is legally obligated to accept that payment, regardless of any preference for another mode.

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