CBDT notifies more modes of e-payments; 6DD limit reduced to ₹ 10000

Notification No. 8/2020-Income-Tax- CBDT has notified Other electronic modes by inserting New Income TAx Rule 6ABBA. It also amended marginal heading of rule 6DD and in rule 6DD for the words ‘account payee bank draft, exceeds twenty thousand rupees’, the words, figures and letters ‘account payee bank draft or use of electronic clearing system through a bank account or through such other electronic mode as prescribed under rule 6ABBA, exceeds ten thousand rupees’ shall be substituted.  New electronic payment methods includes (a) Credit Card, (b) Debit Card, (c) Net Banking; (d) IMPS (Immediate Payment Service); (e) UPI (Unified Payment Interface); (f) RTGS (Real Time Gross Settlement); (g) NEFT (National Electronic Funds Transfer), and (h) BHIM (Bharat Interface for Money) Aadhar Pay.

Further rule 6DD pertaining to cases and circumstances in which a payment or aggregate of payments exceeding Rs 10,000 may be made to a person in a day, otherwise than by an account payee cheque drawn on a bank or account payee bank draft or use of electronic clearing system through a bank account or through such other electronic mode as prescribed in rule 6ABBA has also been amended.

Earlier, sections 40A(3) and 40A(3A) were amended prohibiting payment in cash exceeding Rs 10,000 (from Rs 20,000) and insertion of ‘use of electronic clearing system through a bank account’. Consequential amendments in this regard have been made in Rule 6DD.

Further, the exception as provided in rule 6DD, where the payment was required to be made on a day on which the banks were closed either on account of holiday or strike, has been omitted.

MINISTRY OF FINANCE
(Department of Revenue)
(CENTRAL BOARD OF DIRECT TAXES)

Notification No. 08/2020-Income-Tax

New Delhi, the 29th January, 2020

G.S.R. 56(E).—In exercise of the powers conferred by section 295 read with section 13A, section 35AD, section 40A, section 43, section 43CA, section 44AD, section 50C, section 56, section 80JJAA, section 269SS, section 269ST and section 269T of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the following rules further to amend the Income-tax Rules, 1962, namely:-

1. Short Title and commencement.— (1) These rules may be called the Income-tax (3^rd Amendment) Rules, 2020.

(2) Save as otherwise provided in these rules, they shall come into force on the date of their publication in the Official Gazette.

2. In the Income-tax Rules, 1962 (hereafter referred to as the principal rules),−

(i) after rule 6ABB, the following rule shall be inserted and shall be deemed to have been inserted from the 1^st day of September, 2019, namely:-

“Other electronic modes

6ABBA. The following shall be the other electronic modes for the purposes of clause (d) of first proviso to section 13A, clause (f) of sub-section (8) of section 35AD, sub-section (3), sub-section (3A), proviso to sub­section (3A) and sub-section (4) of section 40A, second proviso to clause (1) of Section 43, sub-section (4) of section 43CA, proviso to sub-section (1) of section 44AD, second proviso to sub-section (1) of section 50C, second proviso to sub-clause (b) of clause (x) of sub-section (2) of section 56, clause (b) of first proviso of clause (i) of Explanation to section 80JJAA, section 269SS, section 269ST and section 269T, namely:−

(a) Credit Card;

(b) Debit Card;

(c) Net Banking;

(d) IMPS (Immediate Payment Service);

(e) UPI (Unified Payment Interface);

(f) RTGS (Real Time Gross Settlement);

(g) NEFT (National Electronic Funds Transfer), and

(h) BHIM (Bharat Interface for Money) Aadhar Pay”;

(ii) in rule 6DD,−

(a) for the marginal heading, the following marginal heading shall be substituted, namely:−

“Cases and circumstances in which a payment or aggregate of payments exceeding ten thousand rupees may be made to a person in a day, otherwise than by an account payee cheque drawn on a bank or account payee bank draft or use of electronic clearing system through a bank account or through such other electronic mode as prescribed in rule 6ABBA.” ;

(b) In the opening paragraph, for the words “account payee bank draft, exceeds twenty thousand rupees”, the words, figures and letters “account payee bank draft or use of electronic clearing system through a bank account or through such other electronic mode as prescribed under rule 6ABBA, exceeds ten thousand rupees” shall be substituted;

(c) in clause (c), sub-clauses (v), (vi) and (vii) shall be omitted;

(d) clause (j) shall be omitted.

[Notification No. 8/2020/F. No. 370142/14/2019-TPL]
SAURABH GUPTA, Under Secy. (Tax Policy and Legislation Division)

Explanatory Memorandum :− It is certified that no person is being adversely affected by giving retrospective effect to this notification, in relation to amendment as provided in sub-clause (i) of clause 2 of this notification.

Note: The principal rules were published in the Gazette of India, Extraordinary, Part-II, Section 3, Sub-section (ii) vide notification number S.O. 969(E), dated the 26^th March, 1962 and last amended vide notification number G.S.R 14(E), dated 6^th January, 2020.