In a move to boost digital payments, the Reserve Bank of India (RBI) announced on Thursday that it will increase the upper limit for tax payments through the Unified Payments Interface (UPI) to ₹5 lakh per transaction, up from the current ₹1 lakh limit. RBI Governor Shaktikanta Das made this announcement during the apex bank’s 50th Monetary Policy Committee (MPC) meeting, aimed at providing greater convenience to taxpayers.
“Currently, the transaction limit for UPI is ₹1 lakh except for certain categories of payments which have higher transaction limits. It has now been decided to enhance the limit for tax payments through UPI from ₹1 lakh to ₹5 lakh per transaction. This will further ease tax payments by consumers through UPI,” the Governor said in his statement.
Announcing further additional measures, he further proposed to introduce a facility of “Delegated Payments” in UPI. This would enable an individual (primary user) to allow another individual (secondary user) to make UPI transactions up to a limit from the primary user’s bank account without the need for the secondary user to have a separate bank account linked to UPI. This measure will further deepen the reach and usage of digital payments.
Additionally to address the problems arising from unauthorised digital lending apps (DLAs), RBI has proposed to create a public repository of DLAs deployed by its regulated entities. The regulated entities (REs) will report and update information about their DLAs in this repository. This measure will help the consumers to identify the unauthorised lending apps.
It has also been proposed to reduce the clearing cycle by introducing continuous clearing with ‘on-realisation-settlement’ in CTS. This means that cheques will be cleared within a few hours on the day of presentation. This will speed up cheque payments and benefit both the payer and the payee.
The Monetary Policy Committee has also decided to keep the policy repo rate unchanged at 6.50%.
