New UPI Transaction Rules Coming Next Week: Changes to Limits Announced
The National Payments Corporation of India (NPCI) has raised the Unified Payments Interface (UPI) transaction limit for tax payments, benefiting millions of taxpayers across the country. Taxpayers can now use UPI to make tax payments up to ₹5 lakh, enhancing ease and promoting larger transactions through this popular payment method.
The National Payments Corporation of India (NPCI) has raised the Unified Payments Interface (UPI) transaction limit for tax payments, benefiting millions of taxpayers across the country. Taxpayers can now use UPI to make tax payments up to ₹5 lakh, enhancing ease and promoting larger transactions through this popular payment method.
Increase in UPI Transaction Limit
According to a circular from NPCI dated August 24, the necessity to increase the per-transaction limit in UPI has arisen due to its emergence as a preferred payment method. The per-transaction value limit has been raised to ₹5 lakh for tax payment categories. The Reserve Bank of India (RBI) had previously announced on August 8, 2024, that the UPI payment limit for taxes would be increased from ₹1 lakh to ₹5 lakh per transaction.
Effective Date and Scope
Starting from Monday, September 16, the updated UPI limit will apply to various transactions, including hospital expenses, educational institutions, IPOs, and RBI retail direct schemes. However, these transactions must be conducted through verified merchants. Users should also ensure that their banks and UPI apps support the increased transaction limit.
Implementation Guidelines
NPCI has instructed banks, payment service providers, and UPI apps to ensure that the new transaction limit is in effect by September 15, 2024. They must also adhere to the strict merchant categorization rules of MCC 9311. These institutions are required to accept UPI as a payment mechanism, especially for high-limit transactions like tax payments.
Current UPI Transaction Limits
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Peer-to-Peer Transactions: The standard UPI transaction limit for peer-to-peer payments is ₹1 lakh. However, banks may set their own UPI transaction limits. For example, according to Google Pay UPI, Allahabad Bank has a UPI transaction limit of ₹25,000, while HDFC Bank and ICICI Bank allow UPI transactions up to ₹1 lakh for peer-to-peer payments. Limits may vary depending on different UPI apps.
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Other UPI Transactions: For capital market and collection-related UPI transactions, the daily limit is ₹2 lakh. Banks can set personal daily UPI transaction limits, so the amount you can transact through your UPI app may depend on your bank and the UPI app you are using.