The Central Board of Direct Taxes (CBDT) has prescribed Section 269SU of the Income Tax Act, 1961 requiring all companies or business entities with total sales, turnover or gross receipts exceeding INR 50 Crores during the immediately preceding previous year to provide facilities for accepting payments through prescribed electronic modes. The electronic mode of payments was prescribed vide Notification No.105/2019 read with Circular 32/2019 dated 30th December,2019.
The CBDT has issued Notification prescribing the mandatory electronic modes of payments with effect from 1st January,2020. However, relaxation has been granted till 31stJanuary,2020 in order to allow sufficient time to specified persons to install and operationalize the facility for accepting payments through prescribed modes.
IMPLICATIONS & MODES OF PAYMENT
Eligible persons now have to provide facility for accepting payment through following electronic modes, in addition to the existing facility of various electronic modes of payment.The prescribed modes of payment are as under:
Debit Card powered by RuPay: RuPay is India's Indigenous card scheme created by the National Payments Corporation of India. It was conceived to fulfill RBI's vision to offer a domestic, open-loop, multilateral system which will allow all Indian banks and financial Institutions in India to participate in electronic payments.
Unified Payments Interface (UPI) (BHIM-UPI): Bharat Interface for Money (BHIM) is a payment app that lets us make simple, easy and quick transactions using Unified Payments Interface (UPI). One can make direct bank payments to anyone on UPI using their UPI ID.One can also request money through the app from one’s UPI ID.
Unified Payments Interface Quick Response Code (UPI QR Code) (BHIM-UPI QR Code): One can also make payments on UPI by scanning their QR Code with the BHIM app.
COMPLIANCE ON INCOME TAX PORTAL
The Income Tax Department has also sent automated emails to those tax payers and businesses whose turnover exceeds INR 50 Croresin the immediately preceding year,intimating them to furnishcertain details on the Income Tax Portal. Following is a snapshot of such email.
The eligible assessees who haven’t received such mails can follow the steps as mentioned in the above snapshot to complete the compliance on the Income Tax Portal by 31stJanuary, 2020.
CONSEQUENCES OF NON COMPLIANCE
The penalty of INR5,000 per day maybe attracted effective from 01stFebruary,2020 under Section 271DB for failure to comply with provisions of Section 269SU.
BANK CHARGES FOR USING PRESCRIBED PAYMENT MODES
As per newly inserted section 10A of Payment and Settlement Systems Act, 2007, bank will not impose any charges for using the electronic modes of payment prescribed under Section 269SU of the Income Tax Act, 1961. Consequently,any charge including the MDR (Merchant Discount Rate) shall not be applicable on or after 01stJanuary,2020 on payment made through prescribed electronic modes.
ACTIONS TO BE TAKEN
The facilities for accepting payments through RuPay Cards and BHIM-UPIis being provided by almost all the banksalong withthe normal current accounts. There may be some one-time setup costs involved to avail this facilities. The eligible persons are advised to contact their respective banks to avail these facilities and comply with the requirements of the law
29th January, 2020
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