The National Payments Corporation of India (NPCI) has increased transaction limits for tax payments using Unified Payments Interface (UPI), allowing people to transfer Rs 5 lakh in a single transaction starting Sunday.
“Acquiring entities must ensure that the classification of their merchants within MCC-9311 strictly adheres to the tax payments only….Merchants shall ensure UPI as a payment mode is enabled for the increased limit for the tax payments category,” said NPCI in a circular.
While announcing its monetary policy statement on August 8, 2024, RBI had announced the enhancement of the limit for tax payments through UPI from Rs 1 lakh to Rs 5 lakh per transaction.
Consumers can now make UPI payments of up to Rs 5 lakh per transaction for the following categories: a) tax payments, b) hospital and educational services, and c) IPOs and government securities.
Two additional enhancements were previously introduced through circulars issued in December 2021 and December 2023.
NPCI has also introduced a new feature called ‘UPI Circle’ on its Unified Payments Interface (UPI) platform. This feature allows primary UPI account holders to securely delegate payment responsibilities to trusted secondary users.
For instance, parents can provide their children with limited access to their accounts for managing daily expenses. The RBI anticipates that this will greatly improve the convenience and inclusivity of digital payments across India.
The RBI’s ongoing efforts to improve the UPI framework also include measures to enhance security. For example, a proposed four-hour window for users initiating payments over Rs 2,000 to new recipients will allow for transaction modifications or reversals, adding an additional layer of control for users
First Published: Sep 13 2024 | 10:58 AM IST
