This follows the NPCI directive to raise the UPI transaction limit specifically for tax payments.
New UPI Transaction Limit
In a circular dated August 24, 2024, NPCI announced the increase in the per transaction limit for tax payments to Rs 5 lakh. This change aims to simplify the tax payment process and encourage more people to use UPI for higher-value transactions.
The new UPI limit will also apply to other transactions, including payments to hospitals, educational institutions, IPOs, and RBI retail direct schemes. Banks and UPI apps must be checked for compatibility with the new limits.
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However, it’s important to note that this increased limit is only applicable to certain transactions, and users should verify with their bank and UPI app to ensure they support this feature.
According to an ET report, banks, payment service providers, and UPI apps have been directed to adjust their systems to accommodate this new limit for the MCC 9311 category, which pertains to verified tax payment merchants. NPCI emphasized that acquiring entities should ensure that their merchants in this category 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,” said Rahul Jain, CFO of NTT DATA Payment Services India. He added that the initiative would enhance the tax-collection system, reduce costs, and offer a more convenient payment method for taxpayers.
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The standard UPI transaction limit for peer-to-peer transactions is Rs 1 lakh, but banks have the authority to set their own limits. For example, Allahabad Bank has a UPI transaction limit of Rs 25,000, while HDFC Bank and ICICI Bank allow transactions of up to Rs 1 lakh for peer-to-peer payments. Additionally, different UPI apps may have varying transaction limits.
Other types of UPI transactions, such as those related to capital markets, collections, insurance, and foreign inward remittances, have a daily limit of Rs 2 lakh. Ultimately, the amount of money an individual can transact through a UPI app depends on the specific limits set by their bank and the UPI app they are using.
Source Homevior.in
