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The way of making payments in India has changed a lot. Now very few people depend on cash payments, as most people prefer digital transactions. Since the introduction of UPI (Unified Payments Interface) in 2016, millions of people in India have adopted this payment method. If you are also among those who use UPI, then there is an important update for you.

The National Payments Corporation of India (NPCI) has increased the transaction limit for UPI payments, which means that you can now transfer large amounts through UPI. Here's how you can take advantage of this increased limit.

How to take advantage of increased UPI limit

In August 2024, NPCI announced that they would increase the limit of UPI transactions, especially for special purposes like tax payments. The limit has now been increased to ₹5,00,000 for a wide range of transactions. This new limit will be effective from September 16, 2024.

You don't need to do anything special to avail of this increased limit. You can continue to make payments in the same way as usual. However, compared to earlier, you can now transfer a larger amount for specific purposes. It is important to note that the increased limit does not apply to regular money transfers to other UPI numbers; instead, it is for special transactions.

Where can you make payments up to ₹5 lakh?

Under the new rules, you can now use UPI to transfer up to ₹5,00,000 for tax payments. Additionally, the increased limit applies to transactions such as payments related to hospital bills, educational institution fees, IPOs, and the Reserve Bank of India's retail direct schemes.

Transaction limits remain the same as before

The increased UPI limit applies only to specific types of payments, and not all transactions will benefit from this higher limit. UPI transaction limits are still set by both your bank and the payment app you use. For example, HDFC Bank and ICICI Bank customers can make UPI transactions of up to ₹1,00,000 per day, while Allahabad Bank customers can only transact up to ₹25,000 per day. You can only transact up to the limit set by your bank.

In short, while the UPI transaction limit has been increased for some payments, it remains the same for others, depending on your bank and its policies.