In a move to further encourage the adoption of digital payments for tax obligations, the Reserve Bank of India has increased the per transaction limit for tax payments made through the popular Unified Payments Interface (UPI) system. Citizens can now make tax payments of up to Rs. 5 lakh in a single UPI transaction, significantly higher than the previous ceiling of Rs. 1 lakh.
The enhancements comes as direct and indirect tax contributions form a major portion of overall government collections. Facilitating convenient, cashless options for taxpayers to fulfill their liabilities holds multiple benefits. It lightens the administrative burden on tax authorities while allowing taxpayers to pay obligations with greater ease.
Industry experts say the revision underscores the steady rise of UPI as the preferred mode for both high and low-value online transactions. By removing barriers for high-value tax transfers, it stands to promote further uptake. Taxpayers gain from a transparent, protected process to manage submissions, reducing risks and costs compared to physical settlements.
National Payments Corporation of India data shows UPI footfalls continue surging, with July transactions exceeding 14 billion – a 45 percent annual jump. Successful expansion into additional use cases like tax remittances maintains its trajectory as digital payments see broader penetration across India. As online payment options multiply, elevating UPI capabilities aligns it for the growing digital preferences of consumers and businesses across payment categories.
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