Acceptance of payment through prescribed electronic modes
[Section-187 as per the Income Tax Act, 2025 (this Act) w.e.f. 1st April, 2026.]
Every person shall provide facility for accepting payment, through electronic modes as prescribed, in addition to other electronic modes, if any, being provided by him, where––
- (a) such person is carrying on business; and
- (b) total sales, turnover, or gross receipts in such business exceeds fifty crore rupees during the immediately preceding tax year.
FAQs on Section 187 of Income Tax Act 2025
1. What is the objective of Section 187?
To promote digital payments and financial transparency by mandating businesses with substantial turnover to provide specified electronic payment facilities.
2. Who is required to comply with Section 187?
Any person carrying on business whose total sales, turnover, or gross receipts exceed ₹50 crore during the immediately preceding tax year.
3. From when is Section 187 applicable?
The section takes effect from 1st April, 2026.
4. What types of payments are covered under this section?
All payments received by the eligible person from customers for business transactions.
5. What electronic modes are required to be provided?
The section refers to “prescribed electronic modes” which will be notified separately by the Central Board of Direct Taxes (CBDT).
6. Is this requirement in addition to existing digital payment options?
Yes. Businesses must provide the prescribed modes in addition to any other electronic modes already offered.
7. Does this apply to professionals or service providers?
No. The provision specifically applies to those carrying on a business—not to professionals or other non-business taxpayers.
8. Is the ₹50 crore threshold based on turnover including GST?
The section does not specify exclusions; hence, it likely includes gross receipts including applicable taxes, unless clarified by a future CBDT notification.
9. What is the consequence of non-compliance?
While Section 187 itself doesn’t specify penalties, failure to comply with such provisions may attract penalties under separate penalty-related sections, which will be notified accordingly.
10. Are there exemptions under this section?
Currently, no exemptions are mentioned in Section 187. However, specific exclusions may be issued via CBDT notification.
11. Will cash payments still be allowed?
Yes, the section mandates provision of electronic modes but does not prohibit cash payments unless restricted elsewhere under this Act.
12. Can a person choose any electronic mode?
Only those electronic modes specifically “prescribed” by the CBDT under this section must be mandatorily offered.
13. Will co-operative societies or government entities be covered?
If they are “persons” carrying on business and meet the turnover threshold, they may be covered—unless exempted specifically.
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