- The new provisions will come into effect from November 1, 2019
- Section 10A has been added to the Payment and Settlement Systems Act. It prohibits banks and payment system providers from imposing any charge on transactions through electronic modes of payments
- A new provision, namely Section 269SU, has been inserted in the Income-tax Act
According to the Central Board of Direct Taxes, the government has asked businesses with turnover exceeding 50 crores to mandatorily provide electronic modes of payment. Also, a new provision, namely Section 269SU, has been inserted in the Income-tax Act. The new provisions will come into effect from November 1, 2019.
A new provision
The CBDT further added that another provision, Section 10A, has been added to the Payment and Settlement Systems Act. This provision prohibits banks and payment system providers from imposing any charge on transactions through electronic modes of payments specified in Section 269SU of the Income-tax Act.
To promote digital payments
The step is in accordance with the government’s decision to promote digital payments. Earlier this year, Finance Minister Nirmala Sitharaman said that there are low-cost digital modes of payment such as BHIM UPI, UPI-QR Code, Aadhaar Pay, NEFT and RTGS, which can be used to promote the less-cash economy.
She further stated that the business establishments with annual turnover more than Rs 50 crore shall offer such low-cost digital modes of payment to their customers and no charges or Merchant Discount Rate shall be imposed on customers as well as merchants.
