Clarifications of payments in under section 269SU of the Income-tax Act, 1961

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Income tax Act 1967

Clarifications of payments in respect of prescribed Any electronic modes under section 269SU of the Income-tax Act, 1961 


                In furtherance it was declared policy objective of the govt to encourage digital economy and move towards a less-cash economy, a replacement provision namely Section 269SU was inserted within the Income-tax Act, 1961 ("the Act"), vide the Finance ( o. 2) Act 2019 ("the Finance Act"), which provides that each person having a business turnover of more than Rs 50 Crore ("specified person") shall be mandatorily provide the facilities for accepting payment  through the prescribed in  electronic modes. The said electronic modes are said to be  prescribed vide notification no. 105/2019 dated 30.12.2019 prescribed electronic modes.

 Thus with the effect from the date 0 I January 2020, the required person should provides the facility for the accepting any payment through the prescribed electronic  manner. 

Section lOA the Payment and Settlement Systems Act 2007 inserted the Finance Act, provides that no Banks or system provider shall impose any charge on a payer making the payment, or a beneficiary receiving the payment, through any electronic modes prescribed under Section 269SU of the Act. 

At the same time that any charge that includes the MDR (Merchant Discount Rate) shall not be applicable after 01 January 2020, on payment that has been made through prescribed electronic modes.

2. during this connection, it's going to be noted that the Finance Act has also inserted section 271 DB within the Act, which provides for levy of penalty of 5 thousand rupees per day just in case of failure by the required person to suits the provisions of section 269SU. so as to allow sufficient time to the required person to put in and operationalise the power for accepting payment through the prescribed electronic modes, it's hereby clarified that the penalty under section 271 DB of the Act shall not be levied if the required person installs and operationalises the facilities on or before 31" January, 2020. However, if the required person fails to try to to so, he shall be susceptible to pay a penalty of 5 thousand rupees ay m 01 February  2020 in section  271 DB Act for sllch failures.

Inserted that : As per notification i.e G{.S.R. 960(E)} BY income tax Department on 27/01/2020

119AA  Mode of payments for purpose under section 269SU.- Every person, carrying on their own business if his total sales and their turnover or gross receipts, as in the case may be, in business that it exceeds fifty crore rupees during immediately preceding previous year shall provide facility of accepting payment through electronic mode  in addition to facility other electronic mode of payment  being provided by such person, namely:—

(i) Debit Card powered by RuPay
(ii) Unified Payments Interface (UPI) or  (BHIM-UPI) and
(iii) Unified Payments Interface Quick Response Code (UPI QR Code) or(BHIM-UPI QR Code)


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