FAQs on How to Add Prescribed Payment Modes on Income Tax Website

Q. 1 Why do I need to provide details of my payment modes?

Ans. As per section 269SU of the Income Tax Act, 1961, 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 ₹50 crore during the immediately preceding previous year.

Q.2 Who is required to provide details on prescribed payment modes?

Ans. Any registered taxpayer who owns a business (B2B/B2C/both) and total sales / turnover / gross receipts have exceeded ₹50 Crores in the previous year, is required to provide details of their payment modes, as per section 269SU of the Income Tax Act,1961.

Q.3 Is there any penalty if I fail to provide the details of prescribed payment modes?

Ans.  Yes. Failure to provide the prescribed electronic modes for accepting payment shall invoke penalty of ₹5000 per day as per section 271DB of the Income Tax Act, 1961.

Q.4 What is Date of Implementation while entering the details of prescribed payment modes?

Ans. It is the date from which all the prescribed payment modes were available for accepting payment from customers.

Q.5 Are there any exemptions applicable?

Ans. With reference to CBDT circular no. 12/2020 dated 20th May 2020, taxpayers fulfilling the following two conditions are exempted from providing details of prescribed payment modes:

  • Having only B2B transactions (i.e. no transaction with retail customer/consumer); and
  • At least 95% of aggregate of all amounts received during the previous year are by any mode other than cash.

Q.6 What is Merchant ID? What is the permissible size of the attachment?

Ans. Merchant ID (MID) is a unique Identification number associated with a business which is provided to merchants by your payment processor. The size of the attachment should be not more than 5 MB.

Q.7 Do I need to provide details of the the payment modes every time the sales / turnover / gross receipts exceed ₹50 Crore?

Ans. No. You will need to provide the necessary details only once.

Q.8 Is there any compliance required if the turnover in my original returns is less than ₹50 Crore but the turnover in my revised returns increased to more than ₹50 Crore?

Ans.  Yes. You will need to provide the necessary details.

Q.9 Is there any compliance required if the turnover in my original returns is more than ₹50 Crore but my turnover in my revised returns reduces below ₹50 Crore?

Ans. You need not provide the details of prescribed payment modes in such a scenario.

Q. 10 Is there any compliance required if the turnover is more than ₹50 Crore in my original returns as well as revised returns?

Ans. If you have provided the details already, no further actions are needed.

Q. 11 How will I know that the details have been updated successfully?

Ans. You will be displayed a success message along with a Transaction ID after successful submission of the details.

  • Please keep a note of the Transaction ID for future references.
  • You will receive a confirmation on your email ID & mobile number registered with the e-Filing portal.
  • After submitting the response, you can view or download the response anytime, through View Response and Download Response options respectively.

Manual on How to Add Prescribed Payment Modes on Income Tax Website

1. Overview

The Add Prescribed Payment Modes service is available to all registered users who own business (B2B/B2C/both) whose total sales / turnover / gross receipts have exceeded ₹50 Crores in the previous year. With this service, you can fulfil the mandatory requirement of providing details of prescribed payment modes as mandated under section 269SU (applicable from 1st January 2020) of the Income Tax Act, 1961 and rule 119AA of Income Tax Rules, 1962.

The prescribed payment modes as defined under Rule 119AA of Income Tax Rules, 1962 are:

  • Debit Card powered by RuPay
  • Unified Payments Interface (UPI) (BHIM-UPI)
  • Unified Payments Interface Quick Response Code (UPI QR Code) (BHIM-UPI QR Code)

If you fail to comply to the said provision, it will attract a penalty of ₹5000 /- per day under section 271DB of the Income Tax Act, 1961.

2. Prerequisites for availing this service

This is a one-time compliance for users who fulfil all the conditions below:

  • Owner of business (B2B / B2C / both)
  • Total sales, turnover or gross receipts for the immediately preceding previous year exceeds ₹50 Crore
  • Registered user in the e-Filing portal with valid user ID and password
  • ITR-3 / ITR-5 / ITR-6 filed for immediately preceding previous year

3. Step-by-Step Guide

Step 1: Log in to the e-Filing portal using your user ID and password.

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Step 2: If your total sales / turnover / gross receipts from business exceeds ₹50 crore for Financial Year based on latest Income Tax Return (ITR) as per Section 269SU of the Income Tax Act,1961, you will be taken to the Prescribed Payment Modes page where you are required to provide status of compliance with Section 269SU and update the prescribed electronic modes provided to accept payment from customers as per Rule 119AA of the Income Tax Rules,1962.

On the Prescribed Payment Modes page, click Continue to proceed.

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Step 3: Enter the Business Details and click Save.

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Note: Click Add another Business if you wish to add other businesses.

Step 4: Depending on the category applicable to you, refer to the relevant section –

Category Section
For B2B Sales Model (Less than 95% of aggregate of all amounts received during the previous year were in modes other than cash) / B2C Sales Model / Both B2B & B2C Sales Model Refer to Section 4.1 
For B2B Sales Model (At least 95% of aggregate of all amounts received during the previous year were in modes other than cash) Refer to Section 4.2
For Compliance in case Prescribed Payment Modes are not available Refer to Section 4.3

4.1. B2B Sales Model (Less than 95% of aggregate of all amounts received during the previous year were in modes other than cash) / B2C Sales Model / Both B2B & B2C Sales Model

Step 1: After adding business details, select the Sales Model as Business to Business only (B2B) or Business to Customers only (B2C) or Both (B2B & B2C), as applicable to you.

Step 1 After adding business details, select the Sales Mode

Step 2: If you own a B2B business and less than 95% of aggregate of all amounts received during the previous year were in modes other than cash, select No, click Continue.

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Step 3: Select Yes if you are having the facility to accept payments through prescribed electronic modes.

Step 3 Select Yes if you are having the facility to accept payments through prescribed electronic modes

Note:

  • If you select Business to Business only (B2B), and at least 95% of aggregate of all amounts received during the previous year were in modes other than cash, follow the steps in section 2. B2B Sales Model(At least 95% of aggregate of all amounts received during the previous year were in modes other than cash)
  • If you do not have the facility to accept payments through the prescribed modes, please follow the steps as per the section 3 Compliance in case Prescribed Payment Modes are not available

Step 4: Enter the Merchant ID number, Merchant Name and Underlying Bank Account details. 

Add Prescribed Payment Modes Image 7Note: You can add multiple Merchant IDs, Merchant Establishment Names and Bank Accounts by clicking on the respective options.

Step 5: Enter Unified Payments Interface (UPI) (BHIM-UPI) details – Underlying Bank Account details and BHIM UPI ID.

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Note: You can add multiple Bank Accounts and UPI IDs by clicking on the respective options.

Step 6: Select the Date of Implementation, accept the Disclaimer and click Submit.

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Step 7: Click Yes to confirm your response.

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On submission, a success message is displayed along with a Transaction ID. Please keep a note of the Transaction ID for future reference. You will also receive a confirmation message on your email ID and mobile number registered on the e-Filing portal.

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Note: After submitting the response, you can view or download the response anytime, through View Response and Download Response options respectively.

4.2. B2B Sales Model (At least 95% of aggregate of all amounts received during the previous year were in modes other than cash)

Step 1: After adding business details, select the Sales Model as Business to Business only (B2B) and select Yes if at least 95% of aggregate of all amounts received during the previous year were in modes other than cash, click Continue.

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Step 2: Accept the declarations by selecting them and click Submit.

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Step 3: Click Yes to confirm your response.

Step 3 Click Yes to confirm your response

On submission, a success message is displayed along with a Transaction ID. Please keep a note of the Transaction ID for future reference. You will also receive a confirmation message on your email ID and mobile number registered on the e-Filing portal.

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Note: After submitting the response, you can view or download the response anytime, through View Response and Download Response options respectively.

4.3 Compliance in case Prescribed Payment Modes are not available

Step 1: After adding business details, select the Sales Model as Business to Business only (B2B) or Business to Customers only (B2C) or Both (B2B & B2C), as applicable to you.

Step 1 After adding business details, select the Sales Model as Business to Business only (B2B) or Business to Customers only (B2C) or Both (B2B & B2C), as applicable to you

Step 2: If you own a B2B business and less than 95% of aggregate of all amounts received during the previous year were in modes other than cash, select No, click Continue.

If you own a B2B business and less than 95% of aggregate of all amounts received during the previous year were in modes other than cash, select No, click Continue

Step 3: Select No if you do not have the facility to accept payments through prescribed electronic modes.

Step 3 Select No if you do not have the facility to accept payments through prescribed electronic modes

Note: If you select Business to Business only (B2B) and at least 95% of aggregate of all amounts received during the previous year were in modes other than cash, follow the steps as per section 4.2 B2B Sales Model (At least 95% of aggregate of all amounts received during the previous year were in modes other than cash)

Step 4: Enter the Expected date of implementation and the Reason for Failure in establishing the prescribed payment modes as defined in the Income Tax Act, 1961, accept the disclaimer and click Submit.

Step 4 Enter the Expected date of implementation and the Reason for Failure

Note: Failure to provide the electronic modes of accepting payment shall invoke a penalty for each day of default under Section 271DB of the Income Tax Act, 1961.

On submission, a success message is displayed along with a Transaction ID. Please keep a note of the Transaction ID for future reference. You will also receive a confirmation message on your email ID and mobile number registered on the e-Filing portal.

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Note: After submitting the response, you can view or download the response anytime, through View Response and  Download Response options respectively.

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