1. Section 269SU of Income Tax Act, 1961
Section 269SU requires every person who is carrying on business to provide the facility for accepting payments through prescribed electronic modes. These prescribed modes will be in addition to the facility for any other electronic mode of payment already provided to customers by such person.
Section 269SU is applicable to a person when the total sales, turnover or gross receipts from business exceeds Rs 50 crore during the immediately preceding previous year. The section is applicable from 1 November 2019. In such a case, the section is applicable if the sales, turnover or gross receipts exceed Rs 50 crore for the financial year ended 31 March 2019.
2. Rule 119AA notified modes for acceptance of payment
The Central Board of Direct Taxes (CBDT) has notified the prescribed modes of payment for the purpose of section 269SU:
1. Debit Card powered by RuPay
2. Unified Payments Interface (UPI) (BHIM-UPI)
3. Unified Payments Interface Quick Response Code (UPI QR Code) (BHIM-UPI QR Code)
The Rule 119AA is applicable from 1 January 2020. Hence, from 1 January 2020, any person to whom the provisions of section 269SU are applicable should make available to its customers the methods of payment prescribed in Rule 119AA.
3. Penalty for non-compliance
For strictly implementation of this provision, Finance Act also inserted section 271DB in the act which provides for levy of penalty of Rs. 5000/- per day in case of failure by the specified person to comply with the provision of section 269SU. 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 that the penalty under section 271DB of the Act shall not be levied if the specified person installs and operationalizes the facilities on or before 31″ 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.
*The said electronic modes have been prescribed vide notification no. 105/2019 dated 30.12.2019
Author Bio
Circular 12/2020 dated 20.05.2020 grants relief from this compliance if “specified person” has only B2B transactions and atleast 95% sales are non-cash