Reply To: Overview of Payment Systems in India-Notes By RBI

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advtanmoy
Keymaster

Section 269SU of the Income-tax Act 1961.

The following electronic modes of payment for the purposes of Section 269SU have been prescribed vide notification no. 105/2019 dated 30.12.2019 :-

  1. Debit Card powered by RuPay
  2. Unified Payments Interface (UPI) (BHIM-UPI)
  3. Unified Payments Interface Quick Response Code (UPI QR Code) (BHIM-UPI QR Code)

A Circular no. 32/2019 dated 30.12.2019 has also been issued to clarify that based on section 10A of the Payment and Settlement Systems Act 2007, 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. Moreover, in order to allow sufficient time to persons, who are required to provide facilities for accepting payments through prescribed electronic modes, to install and operationalise such facilities, it has been clarified that the penalty under section 271DB of the Act shall not be levied if the facilities are installed and operationalised on or before 31st January, 2020. However, failure to do so shall invoke penalty of five thousand rupees per day from 1st February, 2020 under section 271DB of the Act.

It has been noted from the return of income furnished by you for the Assessment Year 2019-20 that your total sales/ turnover/ gross receipts during the financial year ending 31st March, 2019 exceeds Rs. 50 crore. Therefore, as per section 269SU of the Act, you are required to provide the facilities for accepting payment through the aforesaid prescribed electronic modes. These facilities are required to be operationalised by you on or before 31st January, 2020. Failure to do so may make you liable for levy of penalty of five thousand rupees per day from 1st February, 2020 under the Act.