Refund charges imposed on e-payments since Jan this year: CBDT to banks

The Central Board of Direct Taxes (CBDT) has asked banks to refund any charges imposed on prescribed electronic payments, including UPI, since January 1, 2020. Sources in the finance ministry warned that action would be taken against banks which collect any charges on these payments.

The CBDT, through a circular, said that banks are advised to not collect any charges on transactions or payments made through electronic mode.

"There have been some representations that some banks are imposing and collecting charges on transactions carried out through UPI," said the circular issued on Sunday.

A certain number of transactions are allowed free by these banks beyond which every transaction incurs a charge. "This is in violation of the circular issued on December 30, 2019," the circular said.

The circular clarified that Section 10A of the PSS (Payment and Settlement System) Act says that no charge will be applicable on or after January 1, 2020 on payments made through prescribed electronic modes which include UPI, debit cards powered by RuPay, UPI QR Code etc.

According to an amendment to the Income Tax Act, every person with a business turnover of more than Rs 50 crore in the immediately preceding previous year to mandatorily provide facilities for accepting payments through prescribed electronic modes.