The National Payments Corporation of India (NPCI) has increased transaction limits for tax payments using the Unified Payments Interface (UPI). This will benefit millions of Indian taxpayers as they can use UPI to pay taxes up to Rs 5 lakh. The new change aims to simplify and promote big transactions using UPI.
As per the NPCI's circular dated August 24, "With UPI emerging as a preferred payment method, there is a need to enhance the per transaction limit in UPI for specific categories... In view of the above the per transaction value limit in UPI has now been enhanced to Rs 5 lakh for entities under categories aligned to tax payments."
On August 8, 2024, the RBI announced an increase in the limit for tax payments through UPI from Rs 1 lakh to Rs 5 lakh per transaction.
From Monday (September 16), the updated UPI limit will also be applicable for other transactions, including hospital expenses, educational institutions, IPOs, and RBI retail direct schemes.
However, these transactions must be conducted through verified merchants, and users must check with their respective banks and UPI apps to see if they support the increased limit.
Moreover, the NPCI has directed banks, payment service providers, and UPI apps to ensure the new transaction limit is implemented by September 15, 2024.
They must also abide by MCC 9311's strict merchant categorisation rules, which include extensive verification and due diligence.
These companies must accept UPI as a payment mechanism for the higher limit, particularly for tax payments.
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