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Firms, shops get a month extension to go digital
Shops, business firms or companies with an annual turnover of Rs 50 crore or more are required to provide digital payment facilities to customers as part of government's stride towards a less-cash economy, will not have to pay any penalty till January 31 for not installing the system.
New Delhi: Shops, business firms or companies with an annual turnover of Rs 50 crore or more are required to provide digital payment facilities to customers as part of government's stride towards a less-cash economy, will not have to pay any penalty till January 31 for not installing the system.
They would, however, be made to cough up Rs 5,000 per day as penalty for failing to accept payments in the prescribed digital modes from February 1, 2020.
Clarifying this, the Central Board of Direct Taxes (CBDT) said that the move was aimed at giving sufficient time to the specified person to install and operationalise the facility for accepting payment through prescribed electronic modes.
In a circular, the CBDT said that penalty under Section 271DB of the Finance Act shall not be levied if the specified person installs and operationalises the facilities on or before January 31, 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 1st February, 2020 under section 271DB of the Act for such failure," the circular dated December 30 said.
In order to encourage digital economy and move towards a less cash economy, a new provision was inserted in the Income Tax Act to require every person having a business turnover of more than Rs 50 crore to mandatorily provide facilities for accepting payments through prescribed electronic modes.
RuPay and UPI are among the prescribed mode of payment for digital transactions without any Merchant Discount Rate (MDR).
