Electronic payment mandatory for businesses over Rs 50 crore from January 1: CBDT

To achieve the mission of the Government to move towards a less-cash economy to reduce generation and circulation of black money and to promote digital economy a new provision, namely Section 269SU, has been inserted in the Income-tax Act.

WHAT IS SECTION 269SU OF THE INCOME-TAX ACT, 1961?

Every person carrying on business shall provide a facility for accepting payment through the prescribed electronic modes, in addition to the facility for other electronic modes of payment, if any, is provided by such person if his total sales, turnover or gross receipts in business exceed fifty crore rupees during the immediately preceding previous year. Businesses with a turnover of more than Rs 50 crore shall “mandatorily” have to make arrangements to accept payments through electronic modes from January 1.

To facilitate the same, the government has also amended the Sec 10A of Payments Settlement Systems Act 2007 which now states that no bank or system provider shall impose any charge upon anyone, either directly or indirectly, for using the electronic modes of payment prescribed under section 269SU of the Income-tax Act, 1961.

THE FOLLOWING ARE THE PRESCRIBED MODES OTHER THAN EXISTING ELECTRONIC MODES OF ACCEPTING PAYMENTS:-

(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).

PENALTY IN CASE OF NON COMPLIANCE

According to Sec 271DB, If the specified person does not install and operationalize the facility on/before 31st January 2020 then he shall be liable to pay a penalty of five thousand rupees per day from 01st February 2020.

FAQ’s ON Sec 269SU

Q1: What does it mean?
Please ensure that you print your preference to accept payments from customers/debtors/payees in electronic mode by furnishing your E Mode payment details on your invoices/contracts/agreements/order acceptance letter etc.

Q2: Despite arranging NEFT/RTGS/IMPS payments, if the customer comes and hands over a cheque /Demand Draft, what should be done?
1) Please advise them to use E Mode for making payments to you.
2) If they insist for cheque/DD payment only, please get a declaration signed duly by him/them on his/their commercial letterhead if any (refer their Aadhar No and valid Mobile phone No too) stating the following:
> I / We do not have net banking facility or any other E Mode at the time of payment / for the time being / always
> I / We have no option but to pay by mode other than E Mode, though you insisted for payment by E Mode only

Q3: Despite making all possible efforts and arrangements, in case a few payments are received in other than E-mode, will the penalty of Rs 5000 per day, be applied automatically?
It is not an indiscriminate and mechanically imposed penalty. You can prove your genuineness with the necessary evidence and avoid such penalties.

By Parth Shah