Applicability
Every person carrying on business if his total turnover exceeds Rs 50 Crore in preceding financial year. (Applicable for all companies whether or not listed)
Penal Provision
If the above provision not fulfilled w.e.f. 01.02.2020 penalty of 5,000/- per day would be levied after 01st Feb 2020.
However if the business fulfilled the criteria of install or operationalizes Digital payment system till 31st January 2020 so the penalty would not be levied. (section 271DB).
Prescribed Electronic Modes(Rule 119AA via Notification No.105/2019 of Income tax )
A eligible taxpayer can use :-
NEFT (National Electronic Fund Transfer)
RTGS (Real Time Gross Transfer)
IMPS (Immediate Payment Service)
In addition to the facility for the electronic modes of payment following modes has been has been prescribed:-
i) Debit card powered by rupay
ii) UPI, BHIM-UPI
iii) UPI QR Code, BHIM-UPI QR Code
Instruction has been given to bank that no bank or system shall impose or charge on payer or a beneficiary receiving payment through electronic modes prescribed under this section .
Conclusion of 269SU
Suppose a company in preceding financial year turnover is more than Rs 50 crore shall w.e.f. 01.02.2020 shall install or operationalize Digital payment system to accept payment from their customer through modes specified under rule 119AA .If the company fails to do this a penalty of 5000/- per day will be levied from 01.02.2020. So the eligible taxpayers w.e.f 1st Feb 2020 shall not accept any payment through cash .
This provision has been inserted in order to move toward cashless Economy.
Penalty shall be imposed by Joint Commissioner of Income Tax.
No Penalty shall be imposed if there is sufficient cause for such failure.
Thank You
Any advise on this matter is accepted
Author Bio
Under this section, public sector bank is considered as merchant required to make available the above three facilities in every branch. The ordinary cash deposits in to customer accounts should be compulsorily covered by the stipulation of acceptance of digital payment.
if company has retail outs that’s turnover is not exceeding Rs. 50 Crores but Company’s total Turn over exceeding 50 Crores, then this section applies?
Company fulfilling the applicability criteria needs to MAKE AVAILABLE the facility to accept payment through specified modes. It does not bar receipt through any other mode and at the same time compel customer to make payment through given means only.