Governor Shaktikanta Das made important announcements on Thursday during the release of RBI’s bi-monthly monetary policy decisions. The key proposals have been revealed regarding UPI payments.
Das announced that the tax payment limit through UPI will be increased from the existing Rs. 1 lakh to Rs. 5 lakh. This means that individual income tax, property tax, and advance tax payers can now make payments of up to Rs. 5 lakh in a single transaction.
It’s worth mentioning that revising UPI payment limits is not new. By December 2023, it will be possible to pay medical expenses and educational institution fees up to Rs. 5 lakh through UPI.
Additionally, the limit for payments related to capital markets, insurance, and remittances from abroad was set at Rs. 2 lakh. Furthermore, UPI will allow transactions up to Rs. 5 lakh for IPO investments and retail direct schemes.
Previously, those who had to pay tax amounts exceeding Rs. 1 lakh used credit and debit cards or had to visit the bank. UPI payments eliminate these hassles, as they only require entering a PIN to complete the payment.
RBI has also announced that UPI will introduce a delegated payments system, allowing one person (primary user) to authorize another person (secondary user) to make UPI transactions from their bank account up to a specified limit.
The secondary user doesn’t even need to have a bank account linked to UPI. This update aims to facilitate transactions within families and is expected to further enhance the digital payments system.