Rule 48 of Income explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Rule 48 of the Income-tax Rules, 2026 lists nine approved electronic modes of payment: credit card, debit card, net banking, IMPS, UPI, RTGS, NEFT, BHIM Aadhaar Pay and Tier-III full-KYC Central Bank Digital Currency wallets. It replaces rule 6ABBA of the 1962 Rules and adds CBDC for the first time.
A short rule that many other provisions depend on
Rule 48 is barely half a page long, but it is referenced across the Act. It supplies the meaning of "such other electronic mode" for:
- Schedule VIII ;
- section 66(32);
- section 146(5)(a)(ii)(B); and
- sections 185, 186 and 188.
It is also the rule that rule 26 points to when it describes payments made otherwise than by a specified banking or online mode — which is how rule 48 becomes central to the cash disallowance under section 36(4) and section 36(5).
The nine approved modes
| Clause | Mode | Everyday name |
|---|---|---|
| (a) | Credit card | Card payment |
| (b) | Debit card | Card payment |
| (c) | Net banking | Internet banking transfer |
| (d) | IMPS | Immediate Payment Service |
| (e) | UPI | Unified Payment Interface |
| (f) | RTGS | Real Time Gross Settlement |
| (g) | NEFT | National Electronic Funds Transfer |
| (h) | BHIM Aadhaar Pay | Bharat Interface for Money, Aadhaar-authenticated |
| (i) | Tier-III: Full KYC Central Bank Digital Currency wallets, P-CBDC, Wholesale / Cross-border CBDC | Digital rupee |
What is new: clause (i) and the digital rupee
Clauses (a) to (h) are carried over from rule 6ABBA of the 1962 Rules without change. Clause (i) is new. It brings Central Bank Digital Currency into the income-tax framework as an approved payment rail, and it does so with three important qualifiers built into the wording.
- "Tier-III: Full KYC" — the rule does not approve every CBDC wallet. It approves the full-KYC tier. Anonymous or limited-KYC wallet tiers are outside the clause.
- "P-CBDC" — the retail or personal CBDC.
- "Wholesale / Cross-border CBDC" — the institutional and cross-border variants.
A business that settles a supplier payment through a lower-tier CBDC wallet has not used a rule 48 mode. If the amount also exceeds Rs 10,000 in a day and no rule 26 exception applies, the expenditure is exposed to disallowance under section 36(4). Where CBDC is used for business payments, the wallet tier should be confirmed and documented, not assumed.
What rule 48 does not cover
Rule 48 is a list of electronic modes. It does not mention account payee cheques, account payee bank drafts, or use of an electronic clearing system through a bank account. Those are dealt with in the parent provisions as specified banking modes; rule 48 supplements them rather than replacing them.
Equally, rule 48 says nothing about crypto-assets. Virtual digital assets and crypto-asset transactions are addressed separately in the 2026 Rules — the reporting obligations sit in rules 241 to 244 — and a crypto-asset transfer is not an approved mode of payment under rule 48.
Rule 6ABBA and rule 48 compared
| Mode | Rule 6ABBA (1962) | Rule 48 (2026) |
|---|---|---|
| Credit card | Yes | Yes |
| Debit card | Yes | Yes |
| Net banking | Yes | Yes |
| IMPS | Yes | Yes |
| UPI | Yes | Yes |
| RTGS | Yes | Yes |
| NEFT | Yes | Yes |
| BHIM Aadhaar Pay | Yes | Yes |
| Full-KYC CBDC wallets | No | Yes |
Why this matters more than its length suggests
Rule 48 is the pivot for several everyday decisions:
- Business expenditure. A payment above Rs 10,000 in a day to one person survives section 36(4) if it goes through a rule 48 mode. This is the most frequent practical use.
- Deduction-linked payments. Sections 185, 186 and 188 condition certain deductions on the mode of payment; rule 48 defines the qualifying electronic modes for them.
- Non-profit application of income. Section 146(5)(a)(ii)(B) uses the same concept, so a registered non-profit organisation applying income must watch the mode as well as the purpose.
Worked example
On 4 August 2026 a trading firm pays a supplier Rs 90,000. Consider four routes:
| Route | Rule 48 mode? | Section 36(4) outcome |
|---|---|---|
| UPI transfer | Yes — clause (e) | Allowed |
| RTGS | Yes — clause (f) | Allowed |
| Full-KYC CBDC wallet | Yes — clause (i) | Allowed |
| Cash | No | Disallowed, unless a rule 26 exception applies |
Compliance checklist
- Configure payment policy so that any payment above Rs 10,000 to a person in a day defaults to a rule 48 mode.
- Where CBDC is used, confirm and record that the wallet is a Tier-III full-KYC wallet.
- Keep the payment-mode field in the accounting system populated — it is the evidence that the mode test was met.
- Update templates that still cite rule 6ABBA; for tax year 2026-27 onwards the citation is rule 48.
- Do not treat a crypto-asset transfer as a rule 48 mode.
Common mistakes
- Assuming all CBDC wallets qualify. Only the Tier-III full-KYC tier is named.
- Reading rule 48 as an exhaustive list of acceptable payments. Account payee cheques and drafts remain valid specified banking modes under the parent sections.
- Citing rule 6ABBA for a 2026-27 transaction.
- Recording "bank transfer" generically. Where the mode matters, record which mode — NEFT, RTGS, IMPS or UPI.