Tax amendment bill passed in Lok Sabha: What changes for UPI transactions, offshore fund norms
The amendment passed by the House without discussion amid protest by Opposition seeks to remove the existing legal provision that prevents banks and payment service providers from charging Merchant Discount Rate (MDR) on notified electronic payment modes.
The Lok Sabha passed a bill on 6 August that amends the Payment and Settlement Systems Act, 2007, allowing banks and payment service providers to levy charges on payments through unified payments interface (UPI) and other electronic payment modes. This amendment aims to create a sustainable revenue model for banks and PSPs, ensuring the continuity and growth of the digital payments ecosystem in India.
The bill also proposes to unlink the Payment and Settlement Systems Act from the Income Tax Act, giving the government the legal authority to modify the zero-MDR framework on UPI and RuPay card transactions.
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