The National Payments Corporation of India (NPCI) has raised the UPI Transaction Limits for tax payments made using the Unified Payments Interface (UPI). Starting from Sunday, people can transfer up to Rs 5 lakh in a single transaction for tax payments.
This move is aimed at making digital transactions easier and more convenient for users. The NPCI has also issued guidelines to ensure that this higher limit is applied specifically to merchants classified under MCC-9311, which is the category for tax payments.
RBI’s Policy and Reasons Behind the Increase
This change is a result of the Reserve Bank of India’s (RBI) announcement made during its monetary policy statement on August 8, 2024. Previously, the transaction limit for UPI payments was set at Rs 1 lakh, but the RBI has now increased this limit to Rs 5 lakh per transaction.
The decision is intended to make UPI more versatile and applicable to larger payments, such as taxes, hospital services, educational fees, Initial Public Offerings (IPOs), and government securities.
UPI Circle: A New Feature for Secure Payments
Along with the increased transaction limit, the NPCI has introduced a new feature called ‘UPI Circle’. This allows primary UPI account holders to delegate payment responsibilities to trusted secondary users.
For instance, parents can give their children limited access to make payments on their behalf, such as daily expenses. This feature will provide users with more flexibility and convenience while managing finances through digital payments.
Enhanced Security Measures for Larger Transactions
The RBI is also working on improving the security of UPI payments. One of the new security features includes a four-hour window for payments over Rs 2,000 made to new recipients.
During this period, users will be able to modify or reverse transactions, adding an extra layer of protection for high-value payments.
Global and National Impact of Increased UPI Limits
The increased UPI limit is expected to have a significant impact, particularly in India. It makes the digital payment system more efficient for large transactions, which is beneficial for individuals and businesses alike.
This will also help promote the government’s Digital India initiative and increase the adoption of cashless payments across the country. As more people are encouraged to use UPI for large payments, the demand for secure and reliable digital payment platforms is expected to grow globally.
Aims of NPCI and RBI’s Move
The primary goal behind increasing the UPI limit and introducing new features is to:
- Make UPI more accessible for high-value transactions.
- Improve the security and convenience of digital payments.
- Promote cashless transactions and financial inclusion in India.
- Encourage cooperation between businesses and individuals for easier and faster digital payments.
NPCI Increases UPI Transaction Limits up to 5 Lakhs -Key Summary
- NPCI has increased the UPI transaction limit for tax payments from Rs 1 lakh to Rs 5 lakh.
- The RBI announced this change as part of its August 2024 monetary policy.
- The new UPI Circle feature allows trusted secondary users to manage payments securely.
- A four-hour security window has been introduced for payments above Rs 2,000 to new recipients.
This move supports Digital India and promotes the use of cashless payments for larger transactions.
The limit has been increased to Rs 5 lakh per transaction for tax payments.
UPI Circle allows primary account holders to delegate payment responsibilities to trusted users, such as family members, with limited access.
The RBI announced the increase in UPI transaction limits on August 8, 2024.
The new limit allows for easier payments of taxes, hospital bills, educational fees, IPOs, and government securities.
A four-hour window for payments over Rs 2,000 to new recipients allows users to modify or reverse the transaction, adding an extra layer of security.
