RBI hikes limit for tax payments via UPI from ₹1 lakh to ₹5 lakh
Updated: Aug 8th, 2024
The Reserve Bank has decided to enhance the limit for tax payments through UPI from ₹1 lakh to ₹5 lakh per transaction, RBI Governor Shaktikanta Das announced today.
“UPI has become the most preferred mode of payment, due to its seamless features. Currently, the transaction limit for UPI is capped at ₹1 lakh. Based on the various use cases, the Reserve Bank has periodically reviewed and enhanced the limits for a few categories like capital markets, IPO subscriptions, loan collections, insurance, medical and educational services, etc.,” Das said.
“As direct and indirect tax payments are common, regular, and high value, it has been decided to enhance the limit for tax payments through UPI from ₹1 lakh to ₹5 lakh per transaction. Necessary instructions will be issued separately,” he added.
The RBI is also making a provision for the Introduction of Delegated Payments through UPI which will enable a secondary user to make payments using UPI by making use of the bank account of the primary user. The step is aimed at further deepening the reach and usage of digital payments.
“The Unified Payments Interface (UPI) has a very large user base of 424 million individuals. There is, however, potential for further expansion of the user base,” Das said.
“It is proposed to introduce 'Delegated Payments’ in UPI. Delegated Payments would allow an individual (primary user) to set a UPI transaction limit for another individual (secondary user) on the primary user’s bank account. This product is expected to add to the reach and usage of digital payments across the country. Detailed instructions will be issued shortly,” he added.
The Unified Payments Interface (UPI) has been a key driver in India’s digital payment ecosystem, experiencing a ten-fold increase in transaction volume over the past four years, according to the RBI report on Currency and Finance 2023-24. The volume of UPI transactions skyrocketed from 12.5 billion in 2019-20 to 131 billion in 2023-24, now accounting for 80% of all digital payment volumes in the country.
The report shows that digital payments in India have recorded a compounded annual growth rate (CAGR) of 50% in volume terms and 10% in value terms over the last seven years, involving 164 billion transactions worth ₹2,428 lakh crore in 2023-24. The impressive growth has been supported by the Payment Infrastructure Development Fund (PIDF), which has bolstered the country’s payment infrastructure.
(This story was taken from a syndicated feed, and edited only for style by Gujarat Samachar Digital staff)
Also read:
Transactions worth ₹5,000 crore stalled after ransomware attack on Indian banks
Your privacy
By clicking “Accept all cookies”, you agree Gujarat Samachar can store cookies on your device and disclose information in accordance with our Cookie Policy