Section 269SU & Section 271DB applicability
Section 269SU of the Income Tax Act 1961
- Section 269SU is applicable to every person who carrying on the business and whose turnover exceeds Rs.50 Crores during the immediately preceding previous year.
- Section 269SU requires every person who is carrying on business to provide the facility for accepting payments through prescribed electronic mode
- This section came in to effect from 01-01-2020 and to equip yourself time has given up to 31-01-2020.
- Section 269SU of the Act shall not be applicable to a specified person having only B2B transaction s (i.e. No transaction with retail customer/consumer) if at least 95% of aggregate of all amounts received during the previous year, including amount received for sales, turnover or gross receipts, are by any mode other than cash.
Rule 119AA: Prescribed electronic modes of payment for the purpose of section 269SU:
- Debit Card powered by RuPay;
- Unified Payments Interface (UPI) (BHIM-UPI); and
- Unified Payments Interface Quick Response Code (UPI QR Code) (BHIM-UPI QR Code).”
Section 10A of the Payment and Settlement Systems Act 2007
This section inserted by the Finance Act which provides that no bank or system provider shall impose any charge including MDR (Merchant Discount Rate) on a payer making payment, or a beneficiary receiving payment, through electronic mode prescribed under Section 269SU of the Act.
Section 271DB of the Income Tax Act 1961 (i.e. Penalty for failure to comply with provisions of section 269SU)
- If a person who is required to provide facility for accepting payment through the prescribed electronic modes of payment referred to in section 269SU, fails to provide such facility, he shall be liable to pay, by way of penalty, a sum of 5000/- for every day during which such failure continues:
Provided that no such penalty shall be imposable if such person proves that there were good and sufficient reasons for such failure.
- Any penalty imposable under this section shall be imposed by the Joint Commissioner of Income-tax.
- However, no penalty would be levied if the person installs and operationalises the prescribed payment facility by 31 January 2020.
- The penalty of Rs 5,000 per day would be leviable from 1 February 2020.
To Download the Full Circular No.32/2019 Click Here
Circular No. 32/2019
F.No.370142/35/2019-TPL
Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes
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Dated: 30th December, 2019
Sub.: Clarifications in respect of prescribed electronic modes under section 269SU of the Income-tax Act, 1961 – reg.
- 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 (“the Act”), vide the Finance (No. 2) Act 2019 (“the Finance Act”), which provides that every person having a business turnover of more than Rs 50 Crore (“specified person”) shall mandatorily provide facilities for accepting payments through prescribed electronic modes. The said electronic modes have been prescribed vide notification no. 105/2019 dated 30.12.2019 (“prescribed electronic modes”). Therefore, with effect from 01st January, 2020, the specified person must provide the facilities for accepting payment through the prescribed electronic modes. Further, Section 10A of the Payment and Settlement Systems Act 2007, inserted by the Finance Act, 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 Act. Consequently, 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.
- In this connection, it may be noted that the Finance Act has also inserted section 271DB in the Act, which provides for levy of penalty of five thousand rupees per day in case of failure by the specified person to comply with the provisions of section 269SU. In order to allow sufficient time to the specified person to install and operationalise the facility for accepting payment through the prescribed electronic modes, it is hereby clarified that the penalty under section 271 DB of the Act shall not be levied if the specified person installs and operationalises the facilities on or before 31″ January, 2020. However, if the specified person fails to do so, he shall be liable to pay a penalty of five thousand rupees per day from 01st February, 2020 under section 271DB of the Act for such failure.
(Ankur Goyal)
Under Secretary to the Govt. of lndia
Copy to:
I. PS to FM/OSD to FM/PS to MoS(F)/OSD to MoS(F)
2. PPS to Secretary (Revenue)
3. Chairman, CBDT & All Members, CBDT
4. All Pr. DGsIT/Pr. CsIT
5. All Joint Secretaries/CsIT/Directors/Deputy Secretaries/Under Secretaries of CBDT
6. The C&AG of India
7. The JS & Legal Adviser, Ministry of Law & Justice, New Delhi
8. CIT (M&TP), Official Spokesperson of CBDT
9. O/0 Pr. DGIT (Systems) for uploading on official website
10. JCIT (Database Cell) for uploading on www.irsofficersonline.gov.in