One more step has been taken by the government towards digital and cash less economy by inserted a new provision namely section 269SU in Income Tax Act, 1961 which provides that every person having turnover, sales or gross receipts, as the case may be, in business exceeds 50 crore rupees (specified person) during immediately preceding previous year shall mandatorily provide facilities for accepting payments through prescribed electronic modes*.

Further, Section 10A of the Payment and Settlement Systems Act 2007, inserted by the Finance Act, 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 Act. Consequently, any charge including the MDR (Merchant Discount Rate) shall not be applicable on or after 01st January, 2020 on payment made through prescribed electronic modes.

hands with payment terminal and credit card

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 operationalise 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 operationalises 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

Rule -119AA: – Modes of payment for the purpose of section 269SU-

Every person, carrying on business, if his total sales, turnover or gross receipts, as the case may be, in business exceeds fifty crore rupees (Specified person) during the immediately preceding previous year shall provide facility for accepting payment through following electronic modes, in addition to the facility for other electronic modes of payment, if any, being provided by such person, namely:—

(i) Debit Card powered by RuPay;

(ii) Unified Payments Interface (UPI) (BHIM-UPI); and

(iii) Unified Payments Interface Quick Response Code (UPI QR Code) (BHIM-UPI QR Code).

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21 Comments

  1. Vijay Thakkar says:

    In case of Co-operative Banks having turnover in excess of Rs. 50 crore, whether provisions of section 269SU will be applicable?

  2. Rupin Merchant says:

    Partnership firm into the share trading, f & o, intraday and online commodities business, where transection only with RTGS or NEFT is also require to give such facility where there is no customer kind of situation arise !

  3. Rupin Merchant says:

    A partnership firm only into trading of shares, f & O, indtraday and commodities, etc. All the payments to BSE, NSE or Commodity Exchanges received or paid through net banking and they are not at all associate with any customer kind of situation. In this situation this section is applicable to the Partnership Firm ? and require to keep such facilities mentioned in the Act. ?

  4. Ronak Khandelwal says:

    Do we have to mention the details of BHIM -UPI and BHIM-UPI QR code on our sales invoice ??

    or do we just have to inform to our customers through mail about these payment details. ?

  5. Abhishek says:

    I have given “no” option in the efiling site. Its asking me for Implementation date. Which is the last date for Implementation? (For example: whether can i give it as March 31st, 2020?)

  6. SHAHMEHTA AND ASSOCIATES says:

    OUR CLIENT IS DEALING IN DIAMONDS PRESENTLY THEY ARE ACCEPTING PAYMENTS OF TRADING TRANSACTIONS EITHER BY CHEQUE/DRAFT AND NEFT OR RTGS
    IS IT MANDATORY FOR THEM TO HAVE PRESCRIBED MODE OF PAYMENT AS PER NOTIFICATION NO 105/2019 DATED 30.12.201- SECTION 269SU

        1. moksh_kathuria says:

          Yes Devkant Ji

          I recently checked that option to report has been available in Income Tax portal under compliance section as prescribed payment mode.

    1. moksh_kathuria says:

      This section did not deny for accepting payment in any mode. This section only explain that all three notified mode should be implemented. If any of your client want to pay in these notified mode, you can not deny him/her for accepting the payment in these notified mode.

  7. ALTAF ALWI says:

    can you define the defination of specified person related to section 269SU ?
    can we treated specified person as per income tax defination under section 2(31) ?

    1. moksh_kathuria says:

      Yes, it is as per section – 2(31), but apart from this one more condition has been linked with it that any specified person whose turnover or gross receipt exceeds 50 crore rupees during immediately preceding previous year shall mandatorily provide facilities for accepting payments through prescribed electronic modes.

    1. moksh_kathuria says:

      If anyone of your client want to pay you through any of the above mentioned mode, you can not deny for the same and correspondingly charges (merchant discount rate) deducted for accepting payment through these modes has been abolished recently.

      For implementation the same, contact your banking partner.

  8. vivek says:

    Sir Whether only 1 mode (like UPI QR Code) is sufficient for compliance of law or all three modes is required to implement.

    (i) Debit Card powered by RuPay;

    (ii) Unified Payments Interface (UPI) (BHIM-UPI); and

    (iii) Unified Payments Interface Quick Response Code (UPI QR Code) (BHIM-UPI QR Code).

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