The Direct Tax Code (DTC) 2025 mandates that specified persons must provide facilities for accepting payments through prescribed electronic modes. This requirement has significant implications for retail businesses and e-commerce platforms. Under Section 269SU, every person carrying on business must provide facility for accepting payment through prescribed electronic modes if their total sales, turnover or gross receipts exceeds ₹50 crore during the immediately preceding previous year. This guide analyses the digital payment compliance requirements for retail and e-commerce platforms.
The Digital Payment Mandate Framework
Section 269SU — Mandatory Digital Payment Facility
Section 269SU provides that 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, as the case may be, in business exceeds ₹50 crore during the immediately preceding previous year.
Prescribed Electronic Modes — Rule 119AA
Rule 119AA of the Income-tax Rules, 2026 prescribes the following electronic modes:
- Debit Card powered by RuPay
- Unified Payments Interface (UPI) (BHIM-UPI)
- Unified Payments Interface Quick Response Code (UPI QR Code) (BHIM-UPI QR Code)
Additional Electronic Modes
The DTC recognises various other electronic modes of payment, including:
- Credit Card
- Debit Card
- Net Banking
- IMPS (Immediate Payment Service)
- UPI (Unified Payment Interface)
- RTGS (Real Time Gross Settlement)
- NEFT (National Electronic Funds Transfer)
- BHIM (Bharat Interface for Money) Aadhaar Pay
Applicability to Retail and E-commerce Platforms
When Does the Mandate Apply?
The digital payment mandate applies to retail businesses and e-commerce platforms if:
- The entity is carrying on business
- Total sales, turnover or gross receipts exceeds ₹50 crore during the immediately preceding previous year
Impact on Retail Businesses
- Retail businesses must provide the prescribed electronic modes for accepting payments
- This applies to both physical stores and online channels
- Compliance requires infrastructure investment
Impact on E-commerce Platforms
- E-commerce platforms must provide the prescribed electronic modes for accepting payments
- This applies to the platform's payment acceptance infrastructure
- Compliance requires integration with payment gateways
Prescribed Electronic Modes
1. RuPay Debit Card
RuPay is India's indigenous payment network. Retail and e-commerce platforms must provide the facility to accept payments through RuPay debit cards.
2. UPI (BHIM-UPI)
Unified Payments Interface (UPI) is a real-time payment system. Platforms must provide the facility to accept payments through UPI.
3. UPI QR Code (BHIM-UPI QR Code)
Platforms must display UPI QR codes for customers to scan and pay.
4. CBDC Wallets (Tier-III)
Central Bank Digital Currency (CBDC) wallets with full KYC are recognised as electronic modes of payment.
Compliance Requirements
Infrastructure Setup
Retail and e-commerce platforms must:
- Set up the infrastructure to accept payments through prescribed electronic modes
- Display payment options prominently
- Provide prescribed modes in addition to other electronic modes
For Physical Retail Stores
- Install RuPay POS machines
- Display UPI QR codes
- Enable CBDC wallet acceptance
- Train staff on accepting these modes
For E-commerce Platforms
- Integrate RuPay payment gateway
- Integrate UPI payment option
- Display UPI QR codes on payment pages
- Enable CBDC wallet acceptance
Penalty for Non-Compliance
Section 271DB — Penalty
Section 271DB provides that if a person who is required to provide facility for accepting payment through the prescribed electronic modes of payment referred to in Section 269SU fails to provide such facility, he shall be liable to pay, by way of penalty, a sum of ₹5,000 for every day during which such failure continues.
Other Consequences
- Adverse observations in tax audits
- Reputational damage
- Regulatory action
Practical Compliance Checklist
For Retail Businesses
- Assess whether turnover exceeds ₹50 crore
- Install RuPay POS machines at all billing counters
- Display UPI QR codes prominently
- Enable CBDC wallet acceptance
- Train staff on accepting prescribed modes
- Maintain records of digital payments accepted
For E-commerce Platforms
- Assess whether turnover exceeds ₹50 crore
- Integrate RuPay payment gateway
- Integrate UPI payment option
- Display UPI QR codes on payment pages
- Enable CBDC wallet acceptance
- Maintain records of digital payments accepted
Consequences of Non-Compliance
Penalty
Section 271DB provides for a penalty of ₹5,000 for every day during which the failure continues.
Tax Audit Implications
Non-compliance may result in adverse observations in tax audits.
Reputational Damage
Failure to provide digital payment options may damage the business's reputation.
Expert Legal Guidance
Anuj Desai & Associates provides comprehensive legal advisory services on digital payment mandate compliance for retail and e-commerce platforms. Our direct tax experts help businesses understand their obligations, set up compliant systems, and navigate the regulatory framework. We assist in applicability assessment, infrastructure setup, and representation before income-tax authorities.
Disclaimer: This article provides general information and does not constitute legal advice. For specific guidance on digital payment mandate compliance or any other direct tax matter, please consult qualified legal professionals.
Need Expert Legal Guidance?
Navigating the digital payment mandate compliance framework requires experienced legal counsel. At Anuj Desai & Associates, we provide comprehensive direct tax advisory services, including:
- Applicability Assessment: Evaluation of digital payment mandate obligations
- Infrastructure Setup: Guidance on setting up compliant payment infrastructure
- Penalty Defence: Representation in penalty proceedings
- Compliance Review: Review of digital payment compliance
Contact us for expert legal guidance on your digital payment compliance matters.