Electronic payment mandatory for businesses over Rs 50 crore from November 1: CBDT

Electronic payment mandatory for businesses over Rs 50 crore from November 1 CBDT

The government has asked businesses with turnover exceeding Rs 50 crore to mandatorily provide electronic modes of payment from November 1. To this end, a new provision, namely Section 269SU, has been inserted in the Income-tax Act.

The CBDT further said that another provision, Section 10A, has been added to the Payment and Settlement Systems Act. The provision prohibits banks and payment system providers from imposing any charge on transactions through electronic modes of payments specified in Section 269SU of the Income-tax Act.

These new provisions will come into effect from November 1, 2019, the CBDT said. The Centre has invited applications from banks and system providers to include their payment systems under the list of prescribed modes of digital transactions under Section 269SU.




In her Budget speech earlier this year, Finance Minister Nirmala Sitharaman had proposed to add a section to the Income-tax Act directing business with an annual turnover over Rs 50 crore to provide low-cost electronic modes of payments. These include systems like BHIM UPI, UPI-QR Code, Aadhaar Pay, certain Debit cards, NEFT and RTGS.

For ensuring compliance, a suitable penalty provision is also proposed to be inserted in the Act, the Finance Minister had said. In line with this, the Finance (No 2) Act 2019 prescribes a penalty of Rs 5,000 for every day that an eligible entity fails to comply with Section 269SU

FTS- 1275045/2019
Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes
****************************

New Delhi, dated 18th October 2019

NOTICE

Prescribing of certain electronic modes of payment under Section 269SU of the Income-tax Act, 1961-Invitation for application

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, vide the Finance (No. 2) Act 2019, which provides that every person having a business turnover of more than Rs 50 Crore shall mandatorily provide facilities for accepting payments through prescribed electronic modes.

2. Further, 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.




3. These provisions shall come into force with effect from 1st November 2019. The Central Government proposes to prescribe certain electronic modes of payment for the purposes of Section 269SU.

4. Accordingly, applications are hereby invited from the Banks and Payment System Providers, operating an authorized payment system under the Payment and Settlement Systems Act 2007, who are willing that their payment system may be taken into consideration for being prescribed as an eligible electronic payment mode under Section 269SU of the Income-tax Act 1961.

5. The application shall be made in the format given below, and shall be duly signed by the authorized signatory.

Name of the Bank/payment system providerComplete addressPANDetails of license/ registration number to operate the
payment system
Brief note/description on the payment system proposed to be prescribed u/s 269SU



The expression of intent may be sent by e-mail at dirtp14@nic.in by 28th October 2019. Any query or clarification in this regard may be made at 011-2309 2964.

Ankur Goyal

Under Secretary (TPL-IV)




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