Latest Update
As per the Circular No. 12/2020 dated 20th May, 2020, has clarified that the provisions of Section 269SU will not be applicable to ;
- The specified persons having B2B transactions only.
- At least 95% of the aggregate receipts during the previous year is from other than cash mode.
Section 269SU -Applicability
The Finance Act, 2019 introduced Section 206SU and prescribed certain modes of electronic payments for the entities having sales, turnover or gross receipts more than Rs. 50 Cr during the financial year immediately preceding the relevant financial year. The section is applicable w.e.f 1st November, 2019 and for that purpose the sales, turnover or gross receipts of the FY 2018-19 will be taken into consideration. Subsequently Rule 119AA was notified and made applicable from 1st January, 2020 prescribing the modes of acceptance of payment.
Further the modes of payments prescribed under Rule 119AA will be in addition to the facility of any other online mode of payment already used by such person.
Rule 119AA-Notified modes of acceptance of payment
- Debit Card powered by RuPay
- Unified Payments Interface
- UPI QR CODE
Purpose of Section 269SU
The primary purpose behind introduction of Section 269SU was to promote the digital payments and cashless economy. The Government is promoting the low-cost online modes of payments and for that the Government has mandated the banks and the payment system providers not levy any charges or merchant discount rate on the merchants and customers for complying with the requirements of Section 269SU.
Reporting of Compliance of Section 269SU
The Taxpayer when logons to income tax portal, it will get an automated pop-up which will require online compliance for Section 269SU on clicking the continue button and under the Compliance Tab update the prescribed modes of payments under section 269SU
Penalty for non-compliance
In case a person who is required to comply with the provisions of section 269SU fails to comply, a penalty of Rs. 5,000 per day for every day of continuing default will be levied with effect from 1st Feb, 2020. There will no penalty for the period 1st January, 2020 to 31st January, 2020.
Manner of issue of notice for penalty
The Joint Commissioner of Income Tax will issue a show cause notice to the person in default to prove why the penalty should not be imposed for the non compliance and if the person in default proves that there were good and sufficient reasons for such failure, the Joint Commissioner may not impose the penalty.