You can now make online payments of up to Rs 5 lakh in a single UPI transaction, But there’s a catch
The National Payments Corporation of India (NPCI) now allows the transfer of up to Rs 5 lakh in a single payment for select transactions. The new facility came into effect from this Sunday (September 15, 2024). This service is only applicable for tax payments only.
NPCI recently increased the transaction limits for tax payments following the recommendation of the Reserve Bank of India in it’s Monetary Policy Committee meeting on August 8.
The circular released by NPCI stated that the “Acquiring entities must ensure that the classification of their merchants within MCC-9311 strictly adheres to the tax payments only….Merchants shall ensure UPI as a payment mode is enabled for the increased limit for the tax payments category.”
As more people began to use UPI as their payment mode, it become important for NPCI to take majors to increase the UPI transaction limit for select categories for broder use of the UPI.
Meanwhile, to maintain transparency, NPCI has directed the banks, payment service providers (PSPs), and UPI applications to ensure the transaction limit of Rs 5 lakh is only allowed for tax payment transactions.
Currently, the transaction limit for UPI payments is Rs 1 lakh except for certain categories of payments. Now, the per transaction limit for tax payments has been increased from Rs 1 lakh to Rs 5 lakh. This will further ease tax payments by consumers through UPI.
Prior to this, UPI users were allowed to make payments of up to Rs 5 lakh per transaction across various other categories such as hospital and educational services, and IPOs and government securities.
Meanwhile, to further enhance the UPI payment experience for users, NPCI has also introduced a new ‘UPI Circle’ feature on its Unified Payments Interface (UPI) platform.
What is UPI Circle?
The National Payments Corporation of India (NPCI) introduced the ‘UPI Circle’ last month in India. The feature allows users to enable to delegate payment responsibilities to a secondary users securely.With this feature, a primary user can establish a UPI transaction limit for a secondary user and allow them to access the primary user’s bank account.
This innovation was announced by the Reserve Bank of India during its August Monetary Policy Committee (MPC) meeting.
The UPI Circle feature is being tested by various NPCI operated Payment apps such as Amazon Pay, Google Pay, and Bharat Interface for Money (BHIM). The official launch of this feature is slated for the upcoming months. Additionally, PhonePe, the leading third-party application on the UPI platform, is also in the process of testing this new product.