Section 269SU Mandatory Required To Provide Digital Payments Facility.

Section 269SU Mandatory Required To Provide Digital Payments Facility

The Finance (No. 2) Act, 2019 had introduced Section 269SU which required every person with a business turnover, sales or gross receipts exceeding Rs. 50 crores to mandatorily provide facilities for accepting payments through prescribed electronic modes. The CBDT vide its Notification [No.105/2019/F. No. 370142/35/2019-TPL] dated 30th December 2019 has prescribed such electronic modes, which needs to be provided from 1 January 2020.

We are moving towards a Cashless economy and the government has done a lot to remove black money circulation from our system. A cashless economy is a need for modern and progressive India. This is the age of digitization and modern technologies. We have sophisticated and modern computers and mobile phones with and by using simple security features we can use our modern devices as the bank in our hands.

In order to move a step further towards the digital economy, the Government of India introduces Section 269SU to the Income Tax Act, 1961 through Finance Act, 2019.

Section 269SU-

Eligible taxpayers: 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. (Section – 269SU of Income Tax Act 1961)

Penalty for non-compliance: Rs. 5000 (Rupees Five Thousand), for every day during which such failure continues (Section – 271DB)

No penalty under Section 271DB, if the person installs and operationalizes the facilities on or before 31st January 2020.

The penalty will start from 01/02/2020.

Prescribed Electronic Modes-

Every person with a business turnover of more than Rs. 50 crores have to mandatorily provide all the following modes for the purpose of acceptance of payment, which is in addition to the facility for other electronic modes of payment, if any, is provided by such person:

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).

An Eligible Person Taxpayer Can Use:

• Transfer funds into your own linked accounts of the same bank network.

• Transfer funds into the different accounts of the same bank.

• Transfer funds into different bank’s accounts using NEFT.

• Transfer funds into other bank accounts using RTGS

• Transfer funds into various accounts using IMPS.

Types of electronic funds transfer?

• NEFT or National Electronic Funds Transfer

• RTGS or Real Time Gross Settlement

• IMPS or Immediate Payment Service.

Instructions to the Bank

Section 10A of the Payment and Settlement Systems Act, 2007 which was inserted by the Finance Act provides that no bank or system provider shall impose and charge on a payer, or a beneficiary receiving payment, through electronic mode prescribed under Section 269SU of the Act.

Conclusion:  

the steps taken by the Government of India have been welcomed by industry players. Every specified person should provide a digital payment facility till 31/01/2020 to avoid payment of penalty of Rs. 5000/- per day.