January 25, 2020

All you need to know about section 269SU

 

 

• What is the purpose of the section?

 

In order to encourage digital economy and move to a less-cash economy, a new section has been inserted namely 269SU of the Income Tax Act,1961.

 

As per the section, with effect from 1st January, 2020, every person having business turnover of Rs. 50 Crore or more in the immediately preceding financial year needs to mandatorily provide facilities for accepting payments through following modes (in addition to other electronic modes of payment):

• Debit Card powered by RuPay
• Unified Payments Interface (UPI) (BHIM-UPI)
• Unified Payments Interface Quick Response Code (UPI QR Code) (BHIM-UPI QR Code)

 

 

• When is section 269SU applicable?

 

This section is applicable to :

•  All persons,
• Carrying on business,
• Having a business turnover of Rs 50 crore or more during the immediately preceding financial year

 

 

• Instruction to Banks for changes related to Section 269SU applicable after 1st January,2020.

 

Along with this, The finance act also inserted in section 10A of the Payment and Settlement Systems Act 2007 provides:

• No Bank or system provider,
• Shall impose any charge including the Merchant discount rate (MDR),
• On payer making payment or a beneficiary receiving payment,
• Through the above mentioned modes of payment.

 

 

• Penalty for non compliance

 

The finance act also inserted section 271DB of the Income Tax Act,1961, according to which,

• All the persons,
• Who fails to install such facilities for acceptance of payment on or before 31st January,2020,
• Shall be required to pay a penalty of Rs. 5000/- per day from 1st February,2020 till such failure continues.

You can also refer the circular 32/2019 along with notification no. 105/2019 of CBDT dated 30th Dec-2019.