New Delhi: Banks or payment service providers on digital and UPI transactions cannot collect any charges or fees from customers. The Central Board of Direct Taxes (CBDT) has made this clear. According to Section 10 of the Payments and Settlements System 7 Act, 2006 and Section 26 of the Income Tax Act, this fee cannot be levied on customers or merchants. The law has been in force since January 2020. Banks and financial service providers that later charge fees to customers will return the money. Banks have been asked by the CBDT to repay the money collected from customers on January 1, 2020 on digital and UPI transactions.
In a statement, the CBDT said banks could not charge customers or beneficiaries for transactions through Rupee Debit Card, Unified Payment Interface (UPI), UPI Q4 Code, WIM UPI Q4 Code. The notice was issued by the CBDT after it was found that some banks were charging UPI transactions. A certain amount of transaction fee is free while the larger UPI payment is levied at the time of payment. The provision, adopted by banks, violates both the Income Tax Act and the Payment and Settlement System7 Act. Action will be taken against organizations that violate the law, the CBDT said. Banks have been asked to return their money immediately. According to data released by the National Payment Corporation of India (NNPCI), UPI was traded 16 crore times in July. People are becoming more and more dependent on digital transactions after the outbreak of the corona epidemic. “People are afraid to buy cash.”
