News Brief
RBI Raises Limit For Tax Payments Through UPI To Rs 5 Lakh Per Transaction: All You Need To Know
UPI, an instant real-time payment system developed by NPCI. (Representative Image)
To enhance digital payments and enable larger transactions, the Reserve Bank of India (RBI) announced on Thursday (8 August) that the upper limit for tax payments via Unified Payments Interface (UPI) has been raised to Rs 5 lakh per transaction, up from the Rs 1 lakh limit earlier.
The new enhanced limit, which was previously set at Rs 1 lakh, aims to offer greater convenience to taxpayers, particularly for high-value transactions.
This initiative is part of the RBI's efforts to encourage digital payments and decrease dependence on cash.
The RBI expects this measure to promote the adoption of digital payment methods among taxpayers for settling their tax liabilities.
The increased limit will allow taxpayers to make larger tax payments in a single transaction, reducing the need for multiple payments.
Apart from the UPI limit increase, the RBI is also considering the introduction of 'delegated payments' via UPI.
This feature would enable individuals to authorise others to make payments using their UPI account, thereby extending the reach of digital payments.
"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," RBI said in a statement.
