In a move towards a less-cash economy, a new provision namely Section 269SU was inserted in the Income Tax Act, 1961, vide the Finance (No.2) Act 2019. This section requires every person carrying on business and having sales/turnover/gross receipts from business of more than Rs50 crore in the immediately preceding previous year to mandatorily provide facilities for accepting payments through prescribed electronic modes .
Clarification issued by the Ministry of Finance
The Government issued a clarification vide notification no. 12/2020 dated 20.05.2020, stating that provisions of section 269SU of the Act shall not be applicable to a specified person having only B2B transactions (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.
Also find attached below the circular issued by Ministry of Finance.
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