The Reserve Bank of India (RBI) has increased the limit for tax payments via UPI to Rs 5 lakh from Rs 1 lakh earlier, Governor Shaktikanta Das said in his statement post monetary policy announcements on Thursday. The move is aimed at easing tax payments ecosystem in the country, the governor added.

“Currently, the transaction limit for UPI is Rs 1 lakh except for certain category of payments which have higher transaction limits. It has now been decided to enhance the limit for tax payments through UPI from Rs 1 lakh to Rs 5 lakh per transaction. This will further ease tax payments by consumers through UPI,” the RBI chief said.

Introduction of ‘Delegated Payments’ through UPI

Das also announced the introduction of ‘Delegated Payments’ facility in UPI. This would enable an individual (primary user) to allow another individual (secondary user) to make UPI transactions up to a limit from the primary user’s bank account without the need for the secondary user to have a separate bank account linked to UPI, he said. This will further deepen the reach and usage of digital payments, Das added.

“Allowing Delegated Payments can be a pivotal step in expanding the userbase of Unified Payments Interface (UPI). Through this development, two family members can now use one bank account for making UPI payments. While we wait for more details, this initiative will further strengthen and enhance UPI payments especially in rural areas, where financial literacy is less, and one bank account is used by one family. This mechanism will enhance user convenience by ensuring effective control through the usage limit authorization feature. This will also empower consumer confidence with easy, safe, and hassle-free financial transactions, thereby contributing towards a digitally empowered nation,” said Rahul Jain – CFO, NTT DATA Payment Services India.

Also read: RBI Monetary Policy: UPI for cash deposit facility soon! RBI Guv Das announces more UPI initiatives

What is the maximum daily UPI transaction limit?

However, the daily maximum limit for UPI transactions for an individual has not been changed and kept at Rs 1 lakh. The current announcement will be applicable to only tax payments through UPI.

What is the UPI transactions limit for an individual per day?

As per the National Payments Corporation of India (NPCI) guidelines, up to 20 UPI transactions are allowed in a day per UPI account. If the user exceeds this limit, he or she has to wait for 24 hours to make a fresh UPI payment.

Announcing its 3rd bi-monthly monetary policy review for FY 2024-25 announcement on Thursday, the Reserve Bank kept the key policy rate or repo rate unchanged at 6.5%.