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Update:

The CBDT has issued a circular with respect to Section 269SU of the Income Tax Act. As per the circular banks are advised to immediately refund the charges collected, if any, on or after 15th January 2020 on transactions carried out using the electronic modes prescribed under section 269SU of the IT Act and not to impose charges on any future transactions carried through the said prescribed modes    

Finance Act 2019 inserted new Section 269SU after section 269ST of the Income-tax Act, with effect from the 1st day of November 2019, -

Acceptance of payment through prescribed electronic modes under Section 269SU:

Every person, carrying on business, shall provide a facility for accepting payment through prescribed electronic modes, in addition to the facility for other electronic modes, of payment, if any, is provided by such person, if his total sales, turnover, or gross receipts, as the case may be, in business exceeds fifty crore rupees during the immediately preceding previous year."

Summary of the section along with notification and clarification w.r.t. Section 269SU is given in the form of FAQs for a better understanding of this new section.

Who is required to provide electronic modes for accepting payments?


Every person carrying business and having turnover exceeding 50 Crore rupees during the immediately preceding previous year.

What are the prescribed modes for accepting payments under Section 269SU of the Income Tax Act?


CBDT wide Notification No. 105/2019 dated 30/12/2019 prescribed the following modes w.e.f from 1st day of January 2020. (Rule 119AA)

Debit Card powered by RuPay;
Unified Payments Interface (UPI) (BHIM-UPI); and
Unified Payments Interface Quick Response Code (UPI QR Code) (BHIM-UPI QR Code)

Is it compulsory to provide above payment modes?
Yes, every business with turnover exceeding 50 Crore in a preceding previous year must provide above-mentioned payment modes.

What if, business already have NEFT, RTGS facility?
Above mentioned e-payment modes are additional facility along with existing facility. Irrespective of existing facility business must maintain prescribed modes for accepting payment.

Is there any penalty, if business does not maintained prescribed modes of payment as per 269SU ?


Yes, Section 271DB has been inserted w.e.f 01/11/2019, which has a penalty clause as follows:

 

(1) If a person who is required to provide facility for accepting payment through the prescribed electronic modes of payment referred to in section 269SU, fails to provide such facility, he shall be liable to pay, by way of penalty, a sum of five thousand rupees, for every day during which such failure continues:

Provided that no such penalty shall be imposable if such person proves that there were good and sufficient reasons for such failure.

(2) Any penalty imposable under sub-section (1) shall be imposed by the Joint Commissioner of Income-tax.

From which date penalty under section 271DB will be levied?

 

As per clarification issued by CBDT dated 30th December 2019 penalty will not be levied if the prescribed class of person install and operationalize such facility on or before 31st January 2020.

However, if the specified person fails to do so, he shall be liable to pay a penalty of five thousand rupees per day from 01 February 2020.

What are the bank charges for using prescribed payment modes under 269SU?

As per newly inserted section 10A of Payment and Settlement Systems Act, 2007 bank will not impose any charges for using the electronic modes of payment prescribed under section 269SU of the Income-tax Act, 1961

Source:

  • https://www.incometaxindia.gov.in/news/notification_105_2019.pdf
  • https://www.incometaxindia.gov.in/news/circular_32_2019.pdf
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Category Income Tax, Other Articles by - CA Mayur Todmal 



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