Clarifications in respect of prescribed electronic modes under section 269SU of the Income-tax Act, 1961

Last updated: 21 May 2020

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The Central Board of Direct Taxes (CBDT) has issued clarifications regarding Section 269SU of the Income-tax Act, 1961. This section mandates businesses with over Rs 50 Crores in turnover to provide payment facilities via specific electronic modes like RuPay debit cards, UPI, and UPI QR codes. However, the CBDT has clarified that this requirement will not apply to businesses solely engaged in Business-to-Business (B2B) transactions, provided that at least 95% of their total receipts are non-cash.

CircularNo. 12/2020 F.No.370 142135/20 19-TPL Government of India Ministry of Finance Department of Revenue Central Board of Direct Taxes Dated: 20th May, 2020 Subject: Clarifications in respect of prescribed electronic modes under section 269SU of thcIncome-tax Act, 1961 - reg. In furtherance to the declared policy objective of the Government to encourage digital transactionsand move towards a less-cash economy, a new provision namely Section 269SU was inserted i

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FAQ :

Section 269SU requires every person carrying on a business with sales, turnover, or gross receipts exceeding Rs 50 Crores in the preceding financial year to mandatorily provide facilities for accepting payments through prescribed electronic modes.

Initially, 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) were notified as prescribed electronic modes.

A specified person (business with over Rs 50 Crores turnover) having only B2B transactions (no transactions with retail customers) is exempt if at least 95% of their aggregate receipts are non-cash.

A B2B transaction means any transaction that is not with a retail customer or consumer.

The section applies to businesses having sales, turnover, or gross receipts of more than Rs 50 Crores in the immediately preceding previous year.

Circular No : 12/2020
Source : https://www.incometaxindia.gov.in/communications/circular/circular_no_12_2020.pdf

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