Section 269SU and Rule 119AA along with its anticipated challenges have been discussed here

1. New Digital payment facilities - Sec 269SU
Provisions of
Section 269SU
Every person, carrying on business, shall provide facility for
accepting payment through prescribed electronic modes, in
addition to the facility for other electronic modes, of
payment, if any, being provided by such person, if his total
sales, turnover or gross receipts exceeds INR 500 million
during the immediately preceding previous year
CBDT Notification
CBDT has introduced Rule 119AA to the Income-tax Rules,
1962 via the said notification which prescribes the electronic
mode facilities for accepting payment to be provided by every
person mentioned in Section 269SU, in addition to any other
facility being already provided. Such prescribed e-payment
modes are:
• Debit Card powered by RuPay;
• Unified Payments Interface (UPI / BHIM-UPI); and
• UPI QR Code / BHIM-UPI QR Code
Applicability
Provisions of Section 269SU read with
Rule 119AA shall be applicable from
January 1, 2020 to every person satisfying
both the conditions below:
• Every person carrying on business; and
• Total sales, turnover or gross receipts
in such business exceeds INR 500
Million during FY 2018-19
Note: No processing charges shall be imposed by any bank /
system provider
Penalty Provisions
• Section 271DB of the Income-tax Act,
1961 provides for a levy of INR 5,000
as penalty for every day during which
failure to provide such facilities
continues
• However, no such penalty shall be
levied if the specified person installs
and operationalises such facilities on or
before January 31, 2020 [Circular
32/2019]
Section 269SU was introduced through the Finance (No 2) Act, 2019 and the CBDT has recently issued a Notification No
GSR 960(E) dated December 30, 2019 as a supplement to the said section. The provisions of Section 269SU and the
applicability of the notification is discussed underneath.

2. Practical Challenges for Businesses
A number of practical challenges may arise for every person carrying business and others, due to the underneath illustrative aspects:
1. The UPI transaction is limited from INR 10,000 to INR 0.1 Million per day (depending on banks) while BHIM-UPI is limited to only
INR 10,000. Sectors undertaking high value transactions may surely find operational difficulty as they have to provide such facilities
only to avoid penalty provisions. Few of such sectors could be:
− Real Estate sector involving high value transactions on a daily basis, mostly done through existing banking channels such as
RTGS/ NEFT
− B2B transactions such as FMCG manufacturer to distributors (no involvement of retail customers/ B2C transactions)
− Banking and Financial systems for their own income such as interest, processing fees etc
2. There exists an ambiguity on nature of receipts covered by the provisions of Section 269SU as it does not clarify whether the
facility is required to be extended only to customers or any receipts such as acceptance of loans, deposits, reimbursement of
expenses etc
3. The provisions currently do not make any distinction between persons Resident and Non-residents carrying business in India
4. The provisions does not seem to cover “professionals” currently as the Section begin with the words - every person carrying on
"business"
5. Is there a need to take written confirmation/ undertaking from the customer issuing cheques etc that such person has not been
using electronic mode of payments? Is it right to print preference to accept payments from customers/ debtors/ payees in new
electronic mode by furnishing e-mode payment details on invoices/ contracts / agreements / order acceptance letters etc?
6. There will be a huge burden on Banks/ system providers of such facilities as no additional charges could be imposed on
transactions through the modes prescribed in Rule 119AA
7. Increased cost of compliances (initial set-up costs etc for new e-payment facilities)