ACCEPTANCE OF PAYMENT THROUGH PRESCRIBED ELECTRONIC MODES
Government is moving towards digital and cash less economy. A new step has been initiated to avoid cash payment by inserting new section 269SU in the Income tax Act,1961.
Every person, carrying on business, shall provide facility for accepting payment through prescribed electronic modes, in addition to the facility for other electronic modes, of payment, if his total sales, turnover or gross receipts, in business exceeds fifty crore rupees during the immediately preceding previous year.
Prescribed mode for accepting Payment
The Central Board of Direct Taxes (CBDT) has notified the prescribed modes of payment for the purpose of section 269SU through Rule 119AA.
- Debit Card powered by RuPay
- Unified Payments Interface (UPI) (BHIM-UPI)
- Unified Payments Interface Quick Response Code (UPI QR Code) (BHIM-UPI QR Code)
No charges by bank for the above service
A new provision namely Section 10A was also inserted in the Payment and Settlement Systems Act 2007, which provides that no Bank or system provider shall impose any charge on a payer making payment, or a beneficiary receiving payment, through electronic modes prescribed under Section 269SU of the Income-tax Act 1961. Consequently, any charge including the MDR (Merchant Discount Rate) shall not be applicable on or after 01st January, 2020 on payment made through prescribed electronic modes.
Penalty for Non-Compliance
In a case where a person who is covered by the provisions of section 269SU fails to provide the facility of payment under the prescribed modes, such person would be liable for a penalty of Rs 5,000 for every day during which the failure or non-availability of the facility.
Also, the Joint Commissioner may not impose a penalty if the person defaulting with the provisions of section 269SU proves that there were good and sufficient reasons for such failure.
Disclaimer:"The information contained herein is only for informational purpose and should not be considered for any particular instance or individual or entity. We have obtained information from publicly available sources, there can be no guarantee that such information is accurate as of the date it is received or it will continue to be accurate in future. No one should act on such information without obtaining professional advice after thorough examination of particular situation."
Vinay Kumar N