The Reserve Bank of India (RBI) today announced an increase in the transaction limit from Rs 1 lakh to Rs 5 lakh per transaction for tax payments through the Unified Payments Interface (UPI). The increase in limit aims to simplify and facilitate higher-value tax transactions for consumers.
RBI Governor Shaktikanta Das said, "Currently, the transaction limit for UPI is Rs 1 lakh except for certain categories of payments that have higher limits. We have decided to enhance the limit for tax payments through UPI to Rs 5 lakh per transaction. This will make it easier for consumers to make tax payments using UPI."
The existing UPI cap of Rs 1 lakh has undergone regular assessments and modifications for various transaction categories like stock markets, IPO registrations, loan repayments, insurance, healthcare, and education services. With the recent update, tax payments, which are both common and substantial in amount, will now enjoy the advantages of this raised threshold.
The RBI has unveiled a fresh UPI attribute named 'Delegated Payments' alongside the increased transaction limit.
This functionality empowers a primary user to grant authorisation to a secondary user to conduct UPI transactions within a set limit from the primary user's bank account. The secondary user is not required to possess a distinct UPI-linked bank account. This innovation is anticipated to enhance the uptake of digital payments by enhancing convenience.
Governor Das confirmed that the repo rate would stay steady at 6.5%. In addition, the RBI unveiled various initiatives to improve the digital lending environment.
One of the steps involves establishing a public database through a regulated organisation to guarantee precise credit details. Lenders must now submit credit details to Credit Information Companies (CIC) biweekly, which will provide borrowers with faster updates.
Moreover, the RBI is reducing the cheque clearance period from two business days to a few hours, resulting in a substantial acceleration of the process.
