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UPI Transaction Limit: The National Payments Corporation of India (NPCI) has increased the transaction limit for tax payments using UPI to help millions of taxpayers in the country. Now, individuals will be able to use the Unified Payments Interface (UPI) to pay taxes up to Rs 5 lakh per transaction from tomorrow, September 16.

Alignment with RBI policy

This is in line with the Reserve Bank of India's (RBI) monetary policy statement on August 8, 2024, which raised the UPI transaction limit for tax payments. The increase is aimed at making large transactions more convenient for taxpayers. The decision is aimed at simplifying the tax payment process and encouraging more people to use UPI for high-value transactions.

5 lakh UPI transactions: Eligible transaction types
Notably, the new UPI limit will also apply to other transactions, including payments to hospitals, educational institutions, IPOs, and RBI Retail Direct schemes. Hence, banks and UPI apps should check for compatibility with the new limits.

It is important to note that this increased limit only applies to certain transactions, and users should verify with their bank and UPI app to ensure they support this feature.

NPCI urges banks, payment service providers
Meanwhile, NPCI has asked all members – banks, payment service providers and UPI apps – to ensure compliance with the increase in tax payment transaction limit for MCC 9311 category of verified merchants by September 15, 2024.

Previous changes to UPI limits
NPCI revised UPI transaction limits in both December 2021 and December 2023, highlighting its continued efforts to broaden UPI usage across various sectors, including tax payments.

UPI Circle feature launched
The new feature, “UPI Circles”, enables primary UPI account holders to delegate transactions to trusted individuals, improving both security and convenience.

UPI transaction limits for various payments:
The standard UPI transaction limit for peer-to-peer payments is Rs 1 lakh. However, individual banks can set their own UPI limits. For example, Allahabad Bank's UPI transaction limit is Rs 25,000, as per Google Pay's UPI bank-wise limits.

In contrast, banks such as HDFC and ICICI allow transactions of up to Rs 1 lakh. In addition, UPI apps may have their own transaction limits, which may vary across platforms.

There are other transaction limits for different types of UPI transactions. The limit for UPI transactions to capital markets, collections, insurance and foreign inward remittances is Rs 2 lakh per day.

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