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Refund charges collected since January 1 on UPI, RuPay transactions: Tax department to banks

The Central Board of Direct Taxes (CBDT), in a circular on 'imposition of charge on the prescribed electronic modes under section 269SU of I-T Act', also advised banks not to impose any charges on any future transactions carried out through these modes.

August 31, 2020 / 07:48 PM IST

The Income Tax department asked banks to refund the charges collected on or after January 1, 2020, on transactions carried out through electronic modes like RuPay cards or BHIM-UPI.

The Central Board of Direct Taxes (CBDT), in a circular on 'imposition of charge on the prescribed electronic modes under section 269SU of I-T Act', also advised banks not to impose any charges on any future transactions carried out through these modes.

To encourage digital transactions and move towards a less-cash economy, the government inserted a new provision, Section 269SU, in the Finance Act, 2019.

The Act requires a person carrying on business and having sales/turnover/gross receipts from business of more than Rs 50 crore in the immediately preceding previous year to mandatorily provide facilities for accepting payments through prescribed electronic modes.