In furtherance to the declared policy objective of the Government to encourage digital economy and move towards a less-cash economy, a new provision namely Section 269SU was inserted in the Income-tax Act, 1961 ("the Act"), vide the Finance (No. 2) Act 2019 ("the Finance Act"), which provides that every person having a business turnover of more than Rs 50 Crore ("specified person') shall mandatorily provide facilities for accepting payments through prescribed electronic modes. Read the following notification and circular issued by the government regarding the same.
Clarifications in respect of prescribed electronic modes under section 269SU of the Income-tax Act, 1961
Circular No. 32/2019
F.No.370142/35/2019-TPL
Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes
Dated: 30th December, 2019
Sub.: Clarifications in respect of prescribed electronic modes under section 269SU of the Income-tax Act, 1961 - reg.
In furtherance to the declared policy objective of the Government to encourage digital economy and move towards a less-cash economy, a new provision namely Section 269SU was inserted in the Income-tax Act, 1961 ("the Act"), vide the Finance (No. 2) Act 2019 ("the Finance Act"), which provides that every person having a business turnover of more than Rs 50 Crore ("specified person') shall mandatorily provide facilities for accepting payments through prescribed electronic modes. The said electronic modes have been prescribed vide notification no. 105/2019 dated 30.12.2019 ("prescribed electronic modes"). Therefore, with effect from 0151 January, 2020, the specified person must provide the facilities for accepting payment through the prescribed electronic modes. Further, Section 10A of the Payment and Settlement Systems Act 2007, inserted by the Finance Act, 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 Act. Consequently, any charge including the MDR (Merchant Discount Rate) shall not be applicable on or after 01S1 January, 2020 on payment made through prescribed electronic modes.
2. In this connection, it may be noted that the Finance Act has also inserted section 271DB in the Act, which provides for levy of penalty of five thousand rupees per day in case of failure by the specified person to comply with the provisions of section 269SU. In order to allow sufficient time to the specified person to install and operationalise the facility for accepting payment through the prescribed electronic modes, it is hereby clarified that the penalty under section 271DB of the Act shall not be levied if the specified person installs and operationalises the facilities on or before 31' January, 2020. However, if the specified person fails to do so, he shall be liable to pay a penalty of five thousand rupees day ism 015' February, 2020 under section 271DB of the Act for such failure.
(Ankur Goyal)
Under Secretary to the Govt. of India
Copy to:
1. PS to FM/ OSD to FM/ PS to MoS(F)/ OSD to MoS(F)
2. PPS to Secretary (Revenue)
3. Chairman, CBDT & All Members, CBDT
4. All Pr. DGsIT/ Pr. Cs1T
5. All Joint Secretaries/ CsIT/ Directors/ Deputy Secretaries/ Under Secretaries of CBDT
6. The C&AG of India
7. The JS & Legal Adviser, Ministry of Law & Justice, New Delhi
8. CIT (M&TP), Official Spokesperson of CBDT
9. O/o Pr. DGIT (Systems) for uploading on official website
10. JCIT (Database Cell) for uploading on www.irsofficersonline.gov.in
Notification prescribing electronic modes of payment u/s 269SU of the Income-tax Act, 1961
MINISTRY OF FINANCE
(Department of Revenue)
(CENTRAL BOARD OF DIRECT TAXES)
NOTIFICATION
New Delhi, the 30th December, 2019
G.S.R. 960(E).- In exercise of the powers conferred by section 269SU read with section 295 of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the following rules further to amend Income-tax Rules, 1962, namely:-
1. Short title and commencement.-
(1) These rules may be called the Income-tax (16th Amendment) Rules, 2019.
(2) They shall come into force from 1st day of January, 2020.
2. In the Income-tax Rules, 1962, after rule 119A, the following rule shall be inserted, namely:-
"119AA. Modes of payment for the purpose of section 269SU.- Every person, carrying on business, 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 shall provide facility for accepting payment through following electronic modes, in addition to the facility for other electronic modes of
payment, if any, being provided by such person, namely:-
(i) Debit Card powered by RuPay;
(ii) Unified Payments Interface (UPI) (BHIM-UPI); and
(iii) Unified Payments Interface Quick Response Code (UPI QR Code) (BHIM-UPI QR Code).”.
[Notification No.105/2019/F. No. 370142/35/2019-TPL]
ANKUR GOYAL, Under Secy.
Note : The principal rules were published in the Gazetted of India, Extraordinary, Part-II Section-3, Sub-section (ii) vide number S.O. 969(E) dated the 26th march, 1962 and were last amended by the Income-tax (15th Amendment) Rules, 2019 vide notification No. G.S.R. 937(E), dated the 18th December, 2019.
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