Users will no more be required to pay merchant discount rates (MDR) when they make a digital payment using RuPay debit card, UPI, or UPI QR code starting next year.
In a gazette notification, the revenue department of the Finance Ministry announced to amend Income-tax Rules, 1962, and prescribed use of the RuPay card and UPI for digital transactions to avoid MDR charges. The rule will come into effect from January 1, 2020 -- Wednesday.
Companies with an annual turnover of Rs 50 crore or more will have to provide the facility of payment through RuPay debit card, UPI and UPI QR code to their customers.
The companies will be penalised with Rs 5,000 per day if they fail to install and operationalise to accept payment through the prescribed payment facilities until January 31, 2020.
The move was announced by Finance minister Nirmala Sitharaman on Saturday after a meeting with chiefs of public sector banks.
In the Union Budget announcement in July, the government said that customers or merchants would not be charged MDRs as the Reserve Bank of India and banks would absorb the costs.