The '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 person who refuses to accept this money
a legal action can be taken against. Legal tender could be: Limited or
unlimited legal tender . A limited legal tender is that
form of legal tender money, which can be paid in discharge of a debt up to a
certain limit. Beyond this limit, a person may refuse to accept the payment and
no legal action can be taken against him. In India, coins are limited legal
tender. For example: 50 paise coins can
be offered as legal tender for dues up to Rs. 10 and smaller coins for dues up to Rs. 1. On the other hand, paper notes are unlimited
legal tender in India because they can be can be paid in discharge of a debt up to any limit.