Tax department :Refund Charges Collected Since Jan 1 on UPI RuPay Transactions. Despite the government’s directive. The Income Tax Department has given strict instructions to banks charging fees on transactions with RuPay card or Bhim-UPI. The department has said that from January 1 till now, the fee charged under this head should be refunded. Also, do not charge a fee on such transactions in future. The government issued instructions in this regard last year. And with the objective of promoting digital payments and reducing cash in the economy.
Tax department :Refund Charges Collected Since Jan 1 on UPI RuPay Transactions
The Central Board of Direct Taxes (CBDT) has issued a circular to banks in relation to Section 269-SU of the Income Tax Act relating to charging or not charging in transactions by electronic means. It states that banks will not charge any fee for transactions through these channels.
To encourage digital transactions, the government has added a new provision in the Finance Act, 2019 as Section 269-SU. Under this, it has been made mandatory for those who have done business of Rs 50 crore or more in the last year to accept payment in the fixed electronic mode. In this, RuPay Debit Card, UPI (Bhim-UPI) and UPI QR Code have been identified as fixed electronic payment options.
The CBDT said that in December 2019 it was made clear that no charges would be levied on payments from these marked electronic modes. Even after this, such cases are coming up that many banks are collecting fees in this head in different ways. Some banks do not charge fees up to a certain number of transactions and then make a recovery on all transactions. This violation of the provisions is punishable. Banks will have to refund the fee levied on this head.