UPI Payment Limit Raised to ₹5 Lakh: You're Eligible for the New Cap Only If...

The use of UPI payments has grown rapidly, prompting the National Payments Corporation of India (NPCI) to raise the transaction limit for tax payments through UPI. Now, individuals can transfer up to Rs 5 lakh in a single transaction.

NPCI stated, "Acquiring entities must ensure that merchants classified under MCC-9311 are strictly limited to tax payments. Merchants should also enable UPI as a payment option for the higher transaction limit in the tax payment category."

UPI Money Transfer Limit

Users can now make tax payments of up to Rs 5 lakh through UPI, following a recent announcement by the National Payments Corporation of India (NPCI). This decision is set to benefit millions of taxpayers, making the payment process more convenient and efficient.

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5 Lakh is the New Limit

In a circular issued on August 24, 2024, the National Payments Corporation of India (NPCI) announced that due to UPI's growing popularity, the per transaction limit for certain categories, including tax payments, has been increased to Rs 5 lakh. 

NPCI has instructed all banks, payment service providers, and UPI apps to implement this new limit by September 15, 2024. Starting from September 16, users will be able to make tax payments of up to Rs 5 lakh via UPI, streamlining the process for millions of taxpayers.

You Can Transfer 5 Lakh Only If…

The NPCI circular states that the following requirements must be satisfied "to enable this enhancement":

• The circular specifies how banks, payment service providers (PSPs), and UPI apps must adjust the per-transaction limit for the various verified merchant categories before giving them the increased limit.
• Purchasing companies must ensure that merchants with a 'MCC-9311' classification are the only ones processing tax payments. Their inclusion on the 'Verified Merchant' list can only come about through extensive due research.
• In order to pay taxes, merchants are required to accept UPI as a form of payment for transactions up to the new limit.

This limit increase was a need of the hour. This will simplify high-value transactions amongst the customers who find UPI convenient and easy to use. However, customers should first confirm their eligibility for this feature with their respective banks and UPI service providers before attempting to make larger payments.

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