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CBDT prescribes electronic payment modes for newly inserted Sec. 269SU purpose

Vishnu Daya & Co LLP > Alerts  > CBDT prescribes electronic payment modes for newly inserted Sec. 269SU purpose

CBDT prescribes electronic payment modes for newly inserted Sec. 269SU purpose

Dear Sir / Madam,

Mandating acceptance of payments through prescribed electronic modes (Section 269SU): 

In order to achieve the mission of the Government to move towards a less-cash economy to reduce generation and circulation of black money and to promote digital economy, a new section 269SU was inserted by Finance (No.2) Act 2019 w.e.f  01-11-2019 in the Income-tax Act, 1961 (Act) so as to provide that every person, carrying on business, shall, provide facility for accepting payment through the prescribed electronic modes, in addition to the facility for other electronic modes of payment, if any, being provided by such person if his total sales, turnover or gross receipts in business exceed fifty crore rupees during the immediately preceding previous year.

CBDT prescribes electronic payment modes for newly inserted Sec. 269SU purposes:

In the background of this, on 30-12-2019 CBDT vide Circular 32/2019 and Notification 105/2019 prescribed electronic modes for accepting payments in accordance with newly inserted Sec. 269SU, inserts new Rule 119AA and notifies 3 electronic modes, viz

(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).

Further, clarifies that with effect from January 1st, 2020, the above-specified person must provide the facilities for accepting payment through the prescribed electronic modes.

Lastly, clarifies that any charge including the MDR [Merchant Discount Rate] shall not be applicable on or after January 1st on payment made through prescribed electronic modes on payer making payment or beneficiary receiving payment.

Penal Provisions for Non-compliance (Section 271DB):

Penalty for failure to comply with provisions of section 269SU is five thousand rupees, for every day during which such failure continues.

In order to allow sufficient time to the specified person to install and operationalize the facility for accepting payment through the prescribed electronic modes, it is hereby clarified by the CBDT that the penalty under section 271DB shall not be levied if the person installs and operationalize the facilities 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 01st February 2020 under section 271DB of the Act for such failure.

Attached the CBDT circular 32 / 2019 and notification 105 / 2019 for your ready reference. Kindly go through and let us know for any clarifications in this regard.

Vishnu Daya Tax Alert
Vishnu Daya & Co LLP
Chartered Accountants,
GF 7 & 3rd Floor, Karuna Complex, No. 337, Sampige Road, Malleswaram,
Bangalore-560003.
Office: +91-80-23312779 | +91-80-23560633
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