The Reserve Financial institution of India RBI lately introduced a rise in restrict of Unified Funds Interface (UPI) transactions for tax funds. The choice was made as part of RBI’s Financial Coverage announcement final week. With this, customers can now transact as much as Rs. 5,00,000 whereas settling their tax liabilities. Earlier, this restrict was stored at Rs. 1,00,000. Moreover, the central financial institution has additionally proposed the introduction of Delegrated Funds in UPI, which can permit a person to let a second particular person entry their financial institution accounts by way of UPI as much as a particular restrict.
RBI Hikes UPI Transactions for Tax Funds
In a post on X (previously referred to as Twitter), the official deal with of RBI introduced the brand new UPI change and mentioned, “UPI has change into the most-preferred mode of funds, on account of its seamless options. As direct and oblique tax funds are frequent, common and excessive worth, it has been determined to boost the restrict for tax funds via UPI from 1 lakh to five lakh per transaction.”
The central financial institution goals to popularise digital funds for tax settlements via this coverage change. With a restrict of as much as Rs. 5,00,000 per transaction, even these with a better ceiling of tax liabilities will be capable to make funds straight by way of UPI. One important benefit of choosing UPI over conventional strategies equivalent to credit score or debit playing cards is that these transactions incur a further processing charge, which doesn’t exist in UPI.
Notably, UPI transactions for many use circumstances is stored at Rs. 1,00,000 per transaction. Nevertheless, a couple of classes permit a better restrict. Funds in Capital Markets, Collections, Insurance coverage, and Overseas Inward Remittances have a transaction restrict of Rs. 2,00,000, whereas Preliminary Public Providing (IPO) transactions is allowed as much as Rs. 5,00,000. Tax funds have joined the latter class.
In a press conference, RBI Governor Shaktikanta Das mentioned that the choice to extend UPI fee restrict was taken within the Financial Coverage Committee (MPC) as direct and oblique tax funds are typically routine, common, and comprise a excessive worth. Detailed directions concerning this variation will likely be issued individually.
Aside from the UPI restrict hike for tax funds, the MPC additionally launched a brand new function dubbed Delegate Funds. As per RBI, it permits a person categorised as major person to set a UPI transaction restrict for a secondary person on the first person’s checking account.
Put merely, this function will permit an individual to let a member of the family use their checking account by way of UPI to make transactions as much as a particular restrict. This may very well be useful in circumstances the place each particular person within the household doesn’t personal a checking account.
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