Nowadays everyone is using Unified Payment Interface (UPI). But now a big change is going to happen in it. The government has issued a circular stating that taxpayers can soon make tax payments up to Rs 5 lakh through UPI. Which was very less earlier.
This change will give great relief to lakhs of taxpayers. The National Payments Corporation of India (NPCI) has increased the transaction limit for tax payments using UPI to help lakhs of taxpayers of the country. The circular was issued by NPCI on 24 August 2024.
Increasing the limit per transaction
It was said that UPI is emerging as a preferred payment, hence there is a need to increase the per transaction limit in UPI for special categories. The circular further said that the per transaction limit in UPI for institutions has been increased to Rs 5 lakh for tax payment.
What was said in the circular
According to reports, taxpayers can now deposit tax up to Rs 5 lakh with the help of UPI. In a circular issued on August 24, it was said that UPI is becoming the payment option of choice for people. Due to which it is necessary to increase the payment limit for this category. In this, it was also said to increase the per transaction limit of tax payment to Rs 5 lakh.
Limit should be increased for traders
NPCI asked banks, payment service providers and UPI apps to ensure that the transaction limit for MCC 9311 category for traders should be increased. NPCI said that taxpayers should also ensure that UPI is enabled as a payment mode for the increased limit for tax payment category.
Now you can use UPI for tax payment of Rs 5
NPCI has asked banks, payment service providers and UPI apps to implement the increased limit of tax payment limit by September 15. This means that by September 16, one can use UPI to make tax payment of Rs 5 lakh. Along with this, individuals can now make UPI payments of up to Rs 5 lakh per transaction for other categories as well.
Who will it apply
UPI payments up to Rs 5 lakh can also be made for hospitals and educational institutions, IPOs and RBI Retail Direct Schemes. But it is important to note that this will be applicable only on a few transactions. Apart from this, you will have to check with your bank and UPI to know what limit they are allowing.
This is the limit for these services
Mostly for peer to peer transactions, UPI limit of up to Rs 1 lakh has been given. However, these banks decide what their UPI limit will be. For example, Allahabad Bank gives a limit of up to Rs 25000 for UPI payment. HDFC Bank and ICICI Bank have fixed a limit of Rs 1 lakh. Whereas for capital market, collection, insurance and foreign transactions, UPI limit is up to Rs 2 lakh.