Key Points on RBI's Announcement: Hike in UPI Limit for Tax Payments

| Last updated: 09 August 2024

Save Share

Quick Summary

The Reserve Bank of India has significantly increased the UPI transaction limit for tax payments from £1 lakh to £5 lakh per transaction. This move aims to accommodate the higher values often associated with direct and indirect tax payments. Additionally, a new 'Delegated Payments' feature will allow primary users to set UPI limits for secondary users, further expanding digital payment accessibility.

1. Increased UPI Transaction Limit for Tax Payments

The Reserve Bank of India (RBI) has raised the transaction limit for tax payments through UPI from Rs 1 lakh to Rs 5 lakh per transaction.
This decision addresses the need for higher transaction limits in direct and indirect tax payments, which are often high-value.

RBI Hikes UPI Limit for Tax Payments to £5 Lakh

2. Background and UPI Growth

UPI has become the preferred mode of payment due to its seamless features.
Initially capped at Rs 1 lakh, UPI limits have been periodically reviewed and enhanced for various categories such as capital markets, IPOs, loans, insurance, and education.

3. Introduction of Delegated Payments via UPI

RBI will introduce a new feature called "Delegated Payments," allowing a primary user to set a UPI transaction limit for a secondary user on the primary user's bank account.
This initiative aims to expand the user base and deepen the reach of digital payments.

4. Current UPI Statistics

UPI has a user base of 424 million individuals.
Over the past four years, UPI transaction volumes increased tenfold, from 12.5 billion in 2019-20 to 131 billion in 2023-24.
UPI now accounts for 80% of all digital payment volumes in India.

5. Growth of Digital Payments in India

Digital payments have seen a compounded annual growth rate (CAGR) of 50% in volume and 10% in value over the last seven years.
In 2023-24, digital transactions totalled 164 billion, valued at Rs 2,428 lakh crore.
The growth has been supported by the Payment Infrastructure Development Fund (PIDF), which has enhanced the country's payment infrastructure.

Daily Limit Reached

You have reached your daily limit of 2 Free Articles

Subscribe to CCI PRO for unlimited access

Why Upgrade to CCI PRO?

No Ads
WhatsApp Community
Daily E-Newsletter
Unlimited Articles Access
Profile Visitors
Link Social Profiles
Featured Job Posts
Pro Badge
Expert GST Guidance
Unlimited Forum Replies
Download Content in PDF

1 Year PLAN

1999

(Excl. of GST ₹359)

BEST VALUE

2 Years PLAN

3499

(Excl. of GST ₹629)

View all CCI PRO benefits

Already a PRO member? Login here for an ad-free experience.

875 Views 1 Likes Comment Share Income Tax Report

About the Author

Sachin

Finance Manager

Im passionate about accounts and enjoy playing music on the keyboard. When Im not working, youll find me exploring new melodies or diving into the intricacies of Excel. I love solving complex spreadsheets, and Im always up for a challenge that combines creativity with precision.

View Articles

Comments :