Clarification in respect of prescribed electronic modes under section 269SU of the Income-tax Act, 1961

Section 269SU (Acceptance of payment through prescribed electronic modes) of the Income Tax Act, 1961 was inserted vide the Finance Act (No. 2) of 2019.

The Section states that:

Every person, carrying on business, shall provide facility for accepting payment through prescribed electronic modes, in addition to the facility for other electronic modes, of payment, if any, being provided by such person, if his total sales, turnover or gross receipts, as the case may be, in business exceeds fifty crore rupees during the immediately preceding previous year.

The prescribed modes are as follows:

i. Debit Card Powered by Rupay.

ii. Unified Payment Interface (UPI) (BHIM-UPI)

iii. Unified Payment Interface Quick Response Code (UPI QR Code) (BHIM-UPI QR Code).

Now, as per Circular No. 12 of 2020 of the Income Tax Act, 1961, it is clarified that provisions of 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.

To read the Circular: CLICK HERE

Reduction in TDS and TCS Rates by 25% – A Big Enhancement to Liquidity upto Rs. 50,000 Crores

Vide various relief measures announced by Hon’ble Finance Minister of India, Smt. Nirmala Sitharaman Ji on 13th May, 2020, one such relief is Tax Deducted at Source (TDS) rates for all non-salaried payment to residents, and Tax Collected at Source (TCS) rate will be reduced by 25 percent of the specified rates for the remaining period of FY 20-21. This willprovided liquidity to the tune of Rs 50,000 Crores. 

To View the detailed Chart, CLICK HERE.