New digital payment rules to come into effect from November 1

New digital payment rules to come into effect from November 1
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Highlights

Revisions have been made after the announcement in the income tax act as well as in the Payment and Settlement Systems Act 2007.

The government announced that the banks would not enforce charges or Merchant Discount Rate on customers and dealers on digital payments made to establishments which has turnover more than Rs 50 crore, from November 1.

Finance Minister Nirmala Sitharaman in her Budget speech said, "Business institutions with an annual turnover of more than 50 crores should offer low-cost digital modes of payment to their customers, and the RBI and banks should absorb the cost of transactions".

Revisions have been made after the announcement in the income tax act as well as in the Payment and Settlement Systems Act 2007.

The new provisions "shall come into force with effect from November 1, 2019," the Central Board of Direct Taxes (CBDT) said in a circular.

The CBDT has also invited applications from banks and payment system providers who are willing that their payment systems may be used for the purpose as the government plans to prescribe specific electronic modes of payment.

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