RBI changes UPI payment limit to up to Rs 5 lakh per transaction for tax payments, introduces ‘Delegated Payments’ | Tech Tips
The Reserve Bank of India has increased the UPI transaction limit for tax payments, raising it from Rs 1 lakh to Rs 5 lakh. This move aims to make higher-value tax transactions more convenient for consumers. However, the repo rate remains the same at 6.5 percent. Here is everything you need to know.
UPI transaction limit increased from Rs 1 lakh to Rs 5 lakh
The UPI limit, which was previously set at Rs 1 lakh, has now been increased to Rs 5 lakh for tax payments. The central bank expects this move to encourage more taxpayers to use digital payment methods for settling their tax liabilities. By raising the limit, taxpayers can now make larger tax payments in a single transaction, minimising the need for multiple payments.
RBI Governor Shaktikanta Das explained, “Currently, the UPI transaction limit is Rs 1 lakh, except for certain categories of payments with higher limits. We have decided to raise the limit for tax payments via UPI to Rs 5 lakh per transaction, making it easier for consumers to pay taxes using UPI.”
The Reserve Bank has periodically reviewed and increased the limits for various categories such as capital markets, IPO subscriptions, loan collections, insurance, medical, and educational services, based on specific use cases.
Additionally, the RBI has introduced a new UPI feature called Delegated Payments. This feature allows you to authorise another individual as a secondary user to make UPI transactions from your bank account up to a specified limit set by you. The secondary user does not need to have a separate UPI-linked bank account for this to work.
Governor Das also announced that the repo rate would remain steady at 6.5 percent. The RBI also introduced several measures to improve the digital lending ecosystem, including the creation of a public repository under a regulated entity to ensure accurate credit information. Lenders are now required to report credit information to Credit Information Companies (CIC) every two weeks, allowing borrowers to receive faster updates.
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