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CBDT Notified Prescribed Modes of Payment for Section 269SU

cbdt-notified-prescribed-modes-of-payment-for-section-269su

CBDT has finally notified by Notification No. 105/2019 dated 30.12.2019 prescribed modes of payments for the purpose of section 269SU of the Income Tax Act, 1961. 

Recently, CBDT invited application for prescribing certain electronic modes of payment under Section 269SU of the Income-tax Act, 1961.

These rules will come into force from 1st January 2020.



In furtherance to the declared policy objective of the Government to encourage digital economy and move towards a less-cash economy, a new provision namely Section 269SU was inserted in the Income-tax Act 1961, vide the Finance (No. 2) Act 2019, which provides that every person having a business turnover of more than Rs 50 Crore shall mandatorily provide facilities for accepting payments through prescribed electronic modes.

Section 269SU came into effect from 1st November 2019.

A new provision namely Section 10A was also inserted in the Payment and Settlement Systems Act 2007, which 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 Income-tax Act 1961.

To ensure compliance with the provisions of section 269SU, the law has provided a penalty for failing to comply with the provisions of section 269SU.

For this purpose, section 271DB is introduced by the Finance (No. 2) Act, 2019. The section provides for a penalty of Rs. 5,000  for every day during which such failure continues.

Now the CBDT has notified the prescribed modes of payments under section 269SU by a Notification No. 105/2019 dated 30.12.2019 and amended the Income Tax Rules, 1962.

A new Rule 119AA is inserted in the Income Tax Rules, 1962 to mandatorily provide for the following electronic modes of payments in addition to the facility for other electronic modes of payment, if any, being provided, namely-
  1. Debit Card powered by RuPay;
  2. Unified Payments Interface (UPI) (BHIM-UPI); and
  3. Unified Payments Interface Quick Response Code (UPI QR Code) (BHIM-UPI QR Code)
The new Rule 119AA will come into effect from 01.01.2020.

Read the text of the Notification No. 105/2019 dated 30-12-2019-


MINISTRY OF FINANCE

(Department of Revenue)

(CENTRAL BOARD OF DIRECT TAXES)

NOTIFICATION

New Delhi, the 30th December, 2019

G.S.R. 960(E).—In exercise of the powers conferred by section 269SU read with section 295 of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the following rules further to amend Income-tax Rules, 1962, namely:—

1. Short title and commencement.—

(1) These rules may be called the Income-tax (16th Amendment) Rules, 2019.

(2) They shall come into force from 1st day of January, 2020.

2. In the Income-tax Rules, 1962, after rule 119A, the following rule shall be inserted, namely:—

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 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).”


[Notification No.105/2019/F. No. 370142/35/2019-TPL]
ANKUR GOYAL, Under Secy.

Note : The principal rules were published in the Gazetted of India, Extraordinary, Part-II Section-3, Sub-section (ii) vide number S.O. 969(E) dated the 26th march, 1962 and were last amended by the Income-tax (15th Amendment) Rules, 2019 vide notification No. G.S.R. 937(E), dated the 18th December, 2019.

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