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 enable a person to let a second particular person entry their financial institution accounts through UPI as much as a particular restrict.
RBI Hikes UPI Transactions for Tax Funds
In a put up on X (previously often known as Twitter), the official deal with of RBI introduced the brand new UPI change and stated, “UPI has turn into the most-preferred mode of funds, because of its seamless options. As direct and oblique tax funds are widespread, common and excessive worth, it has been determined to boost the restrict for tax funds by UPI from 1 lakh to five lakh per transaction.”
The central financial institution goals to popularise digital funds for tax settlements by 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 of make funds immediately through UPI. One important benefit of choosing UPI over conventional strategies reminiscent of credit score or debit playing cards is that these transactions incur a further processing price, which doesn’t exist in UPI.
Notably, UPI transactions for many use instances is stored at Rs. 1,00,000 per transaction. Nevertheless, a number of classes enable a better restrict. Funds in Capital Markets, Collections, Insurance coverage, and International 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 convention, RBI Governor Shaktikanta Das stated that the choice to extend UPI cost restrict was taken within the Financial Coverage Committee (MPC) as direct and oblique tax funds are usually routine, common, and include a excessive worth. Detailed directions relating to this variation will likely be issued individually.
Aside from the UPI restrict hike for tax funds, the MPC additionally launched a brand new characteristic 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 characteristic will enable an individual to let a member of the family use their checking account through UPI to make transactions as much as a particular restrict. This might be useful in instances the place each particular person within the household doesn’t personal a checking account.
