Big change in UPI policy? Payments above ₹2,000 may carry a fee. What we know
The bill seeks to remove the provision that prevents banks and payment service providers from charging a fee, including MDR, on notified electronic payments.
The Finance Minister of India, Nirmala Sitharaman, has proposed policy changes in the Taxation and Other Laws (Amendment) Bill, 2026, which could potentially introduce a fee for transactions above ₹2,000 on the Unified Payments Interface (UPI). The bill aims to amend the Payment and Settlement Systems Act, 2007, the Income-tax Act, 2025, and the Finance Act, 2026.
Currently, there is no charge on UPI payments, but the proposed amendments could allow the government to introduce a Merchant Discount Rate (MDR) fee for transactions above the specified limit, which may apply to merchants with an annual turnover above ₹1.5 crore. This policy change could still result in UPI transactions remaining free for consumers and small businesses, but final details on the rate and applicable transactions have not been determined.
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