From September 16, taxpayers in India will experience a change in the Unified Payments Interface (UPI) system. The National Payments Corporation of India (NPCI) has increased the UPI transaction limit for tax payments from Rs 1 lakh to Rs 5 lakh per transaction. This adjustment follows an NPCI circular issued on August 24, 2024.
The circular emphasized the increasing popularity of UPI as a payment method and the necessity to support higher-value transactions in certain categories.
Key Changes
Transaction Limit Increase: UPI will now support tax payments up to ₹5 lakh per transaction.
Other Eligible Transactions: This higher limit will also apply to payments for hospitals, educational institutions, IPOs, and RBI retail direct schemes.
Merchant Verification: To use the enhanced limit, merchants must be verified.
Implementation: The new limit takes effect from September 16, 2024. Users should check with their banks and UPI apps to confirm support for this increased limit, as individual banks may have different transaction limits.
For example, Allahabad Bank’s UPI limit is currently ₹25,000, while HDFC Bank and ICICI Bank offer up to ₹1 lakh for peer-to-peer transactions.
NPCI has instructed all banks and payment service providers to ensure compliance by September 15, 2024.
This update aims to streamline the tax payment process and promote the use of UPI for larger transactions. Users are advised to verify compatibility with their bank and UPI app.
The increase in transaction limits is part of NPCI’s initiative to improve the convenience and efficiency of digital payments in India.