Rule 48 of the Income-tax Rules, 2026

Where this rule sits

Rule 48 gives effect to Section 66, Section 146, Section 185, Section 186 and Section 188 of the Income-tax Act, 2025. A rule cannot go beyond the section it serves: where the two seem to differ, the section governs.

← Rule 47  ·  Rule 49 →

What this rule does

The rule lists the payment channels that count as "other electronic modes" wherever that expression is used in Schedule VIII [Table: Sl. No. 1. D(d)], section 66(32), section 146(5)(a)(ii)(B), and sections 185, 186 and 188. Nine modes are listed: 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; and Tier-III: Full kyc Central Bank Digital Currency wallets, P-cbdc, Wholesale/Cross-border cbdc.

Why it is there

Several provisions turn a deduction, an exemption or a disallowance on whether a payment was made by account payee cheque, account payee bank draft or an "other electronic mode", and each of them leaves that last expression to be prescribed. The rule defines it once, in one list, so the same set of channels answers the question under every one of those provisions. It also lets the list be kept current with what banking actually offers, without touching the sections.

Who it applies to

• Any person making or receiving a payment that a provision listed in the rule tests by its mode
• A person claiming a deduction or exemption that depends on payment otherwise than in cash
• A payer resisting a disallowance under sections 185, 186 or 188 on the ground that the payment was electronic

What this means in practice

This is a closed list, and it is the same list for every provision named in the opening words — a mode not on it is not an "other electronic mode" merely because it is electronic and traceable. The rule settles mode only; it does not settle any threshold, timing or ceiling that the section itself imposes, so a payment made through one of these channels can still fail a section's monetary or timing test. The listed cbdc entry is specific: it is Tier-III full kyc Central Bank Digital Currency wallets, P-cbdc and Wholesale or Cross-border cbdc, not central bank digital currency generally.

An example

A firm pays a supplier Rs. 60,000 for a single expense by upi. Because upi is listed at clause (e), the payment is made by an other electronic mode and the mode-based disallowance in the relevant provision is not attracted, though whatever other conditions that provision imposes still have to be met. The same payment made in cash would not be protected by this rule at all.

Where you meet this rule

A reader meets this rule when a payment's mode is challenged — in a disallowance proposed in an assessment, in a tax audit query on the manner of payment, or when deciding how to settle a large business payment so that a deduction is not lost.

The words themselves

What people get wrong

• Assuming any electronic or bank-routed transfer qualifies. Rule 48 lists nine modes and a mode outside that list is not an other electronic mode.
• Reading the rule as curing a payment that fails the section's own test. It settles only the mode; the monetary limits and other conditions of Schedule VIII, section 66(32), section 146(5)(a)(ii)(B) and sections 185, 186 and 188 continue to apply.
• Treating all central bank digital currency holdings as covered. Clause (i) specifies Tier-III full kyc cbdc wallets, P-cbdc and Wholesale or Cross-border cbdc.
• Maintaining a different list of acceptable modes for each of the listed provisions. The rule gives one list for all of them.