Seeking the opportunity to encourage digital payments nation wide, the CBDT (Central Board of Direct Taxes) said that banks are not allowed levy any extra charge on transactions made through electronic modes on or after January 1, 2020. CBDT in a statement said, “… based on section 10A of the Payment and Settlement Systems Act 2007, any charge including the MDR (Merchant Discount Rate) shall not be applicable on or after 1st January, 2020 on payment made through prescribed electronic modes.”
The electronics modes of transactions include
1) Debit card powered by RuPay,
2) Unified Payment Interface (UPI),
3) Unified Payment Interface Quick Response code (UPI QR code), BHIM UPI QR code.
The CBDT said, “According to Section 10 A under the Payments and Settlement Systems Act 2007, no bank or system provider shall impose any charge on a payer making payment or beneficiary receiving payment, through electronic modes prescribed under section 269SU of IT Act.”
