What changed
RBI has reinforced existing instructions that e-payment designated branches must exclusively handle e-payments and not accept physical challans. The directive emphasizes uploading challan data with 'I' in field 36 (cgt_flg) to distinguish e-payment transactions. This follows reports from the Income Tax Department of banks uploading both e-payment and physical challans from the same branch, causing duplicate CINs.
What it means for you
Banks must ensure strict segregation of e-payment and physical challan processing at designated branches to avoid duplicate CINs. Non-compliance could lead to operational issues with tax authorities and regulatory scrutiny. This reinforces the need for robust software validations and branch-level compliance with RBI's government business guidelines.
What you must do
- Ensure designated e-payment branches do not accept physical challans under any circumstances.
- Verify that e-payment challan data uploaded includes 'I' in field 36 (cgt_flg) as per RBI instructions.
- Issue clear internal directives to all branches handling government business to comply with this circular.
- Review branch-level processes to prevent mixing of e-payment and physical challan uploads.
Who it affects
State Bank of India and its associates, All nationalised banks, Axis Bank Ltd, HDFC Bank Ltd, ICICI Bank Ltd, J&K Bank Ltd, Branches designated for e-payment collection
What is the cgt_flg field and why is it important?
The cgt_flg field (field 36) is used to tag e-payment transactions with value 'I' to distinguish them from physical challan payments. This prevents duplicate CINs and ensures accurate reporting to the Income Tax Department.
What happens if a designated e-payment branch also accepts physical challans?
This contravenes RBI instructions and can lead to duplicate CINs, as reported by the Income Tax Department. Banks must ensure strict compliance to avoid regulatory action.
Which banks are specifically addressed in this circular?
The circular is addressed to State Bank of India and its associates, all nationalised banks, Axis Bank, HDFC Bank, ICICI Bank, and J&K Bank.