New Delhi: The Reserve Bank of India (RBI) on Thursday said that the UPI limit for tax payment matters has been increased from Rs 1 lakh to Rs 5 lakh per transaction. This will ease the process of tax payers with higher tax liabilities to pay their dues quickly and without any hassle.
RBI Governor Shaktikanta Das, announcing the outcome of the three-day Monetary Policy Committee (MPC) meeting said UPI transitions can be done up to Rs 5 lakh from the existing Rs 1 lakh for tax payment purposes.
"UPI has become the most-preferred mode of payments, due to its seamless features. Currently, the transaction limit for UPI is capped at ₹1 lakh. Based on the various use-cases, the Reserve Bank has periodically reviewed and enhanced the limits for a few categories like capital markets, IPO subscriptions, loan collections, insurance, medical and educational services etc. As direct and indirect tax payments are common, regular and high value, it has been decided to enhance the limit for tax payments through UPI from ₹1 lakh to ₹5 lakh per transaction. Necessary instructions will be issued separately," Governor Das said.
Ranen Banerjee- Partner and Leader Economic Advisory, PwC India said, "A very important announcement has been on delegated payments in UPI. This will be game changing as far as base expansion for digital payment adoption and financial inclusion is concerned."
However for general transaction limit, it is Rs 1 lakh.
NCPI FAQ mentions, "For normal UPI the transaction limit is up to Rs 1 Lakh per transaction. For few specific categories of transaction in UPI like Capital Markets, Collections, Insurance, Foreign Inward Remittances the transaction limit is up to 2 lakh and for Initial Public Offering and Retail Direct Scheme the limit is up to Rs 5 lakh per transaction."
Rahul Jain – CFO, NTT DATA Payment Services India said this initiative will strengthen the tax-collection system, reduce the cost of tax-collection, and make tax-payments more convenient for taxpayers.
"This also means more benefits to taxpayers in terms of seamless, transparent, secured, and ease of making high value transactions," he added.
