RBI Hikes Limit for Tax Payments Through UPI From INR 1 Lakh to INR 5 Lakh
The Reserve Bank has decided to enhance the limit for tax payments through UPI from Rs 1 lakh to Rs 5 lakh per transaction, RBI Governor Shaktikanta Das announced on Thursday.
Mumbai, August 8: The Reserve Bank has decided to enhance the limit for tax payments through UPI from Rs 1 lakh to Rs 5 lakh per transaction, RBI Governor Shaktikanta Das announced on Thursday. “UPI has become the most preferred mode of payment, due to its seamless features. Currently, the transaction limit for UPI is capped at Rs 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.,” Das said.
“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 Rs 1 lakh to Rs 5 lakh per transaction. Necessary instructions will be issued separately,” he added. The RBI is also making a provision for the Introduction of Delegated Payments through UPI which will enable a secondary user to make payments using UPI by making use of the bank account of the primary user. The step is aimed at further deepening the reach and usage of digital payments. RBI Digital Rupee: Google Pay, Amazon Pay and PhonePe Seek To Join India’s Digital Currency Project.
“The Unified Payments Interface (UPI) has a very large user base of 424 million individuals. There is, however, potential for further expansion of the user base,” Das said. “It is proposed to introduce 'Delegated Payments' in UPI. Delegated Payments would allow an individual (primary user) to set a UPI transaction limit for another individual (secondary user) on the primary user’s bank account. This product is expected to add to the reach and usage of digital payments across the country. Detailed instructions will be issued shortly,” he added.
The Unified Payments Interface (UPI) has been a key driver in India's digital payment ecosystem, experiencing a ten-fold increase in transaction volume over the past four years, according to the RBI report on Currency and Finance 2023-24. The volume of UPI transactions skyrocketed from 12.5 billion in 2019-20 to 131 billion in 2023-24, now accounting for 80 per cent of all digital payment volumes in the country. RBI Repo Rate: Reserve Bank of India Unlikely To Cut Rate in Monetary Policy on August 8, Say Experts.
The report shows that digital payments in India have recorded a compounded annual growth rate (CAGR) of 50 per cent in volume terms and 10 per cent in value terms over the last seven years, involving 164 billion transactions worth Rs 2,428 lakh crore in 2023-24. The impressive growth has been supported by the Payment Infrastructure Development Fund (PIDF), which has bolstered the country's payment infrastructure.
(The above story first appeared on LatestLY on Aug 08, 2024 02:03 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).