Finance Act, 2019 inserted new Section 269SU after section 269ST of the Income-tax Act, with effect from the 1st day of November, 2019. We will discuss about this new section in this article.
Acceptance of payment through prescribed electronic modes :
Every person, carrying on business, shall provide facility for accepting payment through 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, 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. the Section 269SU is given in the form of FAQs for better understanding of this new section.
Who is required to provide electronic modes for accepting payments ?
Every person carrying on business and having turnover exceeding 50 Crore rupees during the immediately preceding previous year.
What are the prescribed modes for accepting payment ?
CBDT wide Notification No. 105/2019 dated 30/12/2019 prescribed 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 the 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 ?
Yes, Section 271DB has been inserted w.e.f 01/11/2019, which has penalty clauses 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 impose, 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 the CBDT dated 30th December, 2019, penalty will not be levied if prescribed class of person install and operationalise 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 ?
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.
The author is CA Mayur Todmal.