Business firms or companies to pay ₹ 5000 fine per day for not accepting digital payment

January 02: 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.

From February 1, businesses will be fined Rs 5,000 per day if they fail to accept payments through digital payment facilities, the Central Board of Direct Taxes (CBDT) said in a circular dated December 30. This will be applicable to companies with an annual turnover of over Rs 50 crore.

CBD notified that business establishments with annual turnover of more than ₹50 crore, shall offer low-cost digital modes of payment (such as BHIM UPI, UPI QR Code, Aadhaar Pay, Debit Cards, NEFT, RTGS etc.) to their customers, and also no charge or Merchant Discount Rates (MDR) shall be imposed on customers and merchants.

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.