This follows the NPCI directive to elevate the UPI transaction limit particularly for tax payments.
New UPI Transaction Limit
In a round dated August 24, 2024, NPCI introduced the improve in the per transaction limit for tax payments to Rs 5 lakh. This change goals to simplify the tax cost course of and encourage extra individuals to use UPI for higher-value transactions.
The new UPI limit may even apply to different transactions, together with payments to hospitals, academic establishments, IPOs, and RBI retail direct schemes. Banks and UPI apps have to be checked for compatibility with the new limits.
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However, it is necessary to word that this elevated limit is simply relevant to sure transactions, and customers ought to confirm with their financial institution and UPI app to guarantee they help this function.
According to an ET report, banks, cost service suppliers, and UPI apps have been directed to alter their techniques to accommodate this new limit for the MCC 9311 class, which pertains to verified tax cost retailers. NPCI emphasised that buying entities ought to make sure that their retailers on this class strictly adhere to tax payments.
“NPCI announcement to increase the transaction limit to Rs 5 lakh for tax payments using UPI, from Rs 1 lakh earlier is a significant move, propelling India towards digitally inclusive economy,” stated Rahul Jain, CFO of NTT DATA Payment Services India. He added that the initiative would improve the tax-collection system, cut back prices, and provide a extra handy cost technique for taxpayers.
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The customary UPI transaction limit for peer-to-peer transactions is Rs 1 lakh, however banks have the authority to set their very own limits. For instance, Allahabad Bank has a UPI transaction limit of Rs 25,000, whereas HDFC Bank and ICICI Bank permit transactions of up to Rs 1 lakh for peer-to-peer payments. Additionally, completely different UPI apps could have various transaction limits.
Other forms of UPI transactions, comparable to these associated to capital markets, collections, insurance coverage, and overseas inward remittances, have a each day limit of Rs 2 lakh. Ultimately, the sum of money a person can transact by means of a UPI app relies on the particular limits set by their financial institution and the UPI app they are utilizing.
