In a major move to enhance the convenience of digital payments, the Reserve Bank of India (RBI) has increased the limit for tax payments made through the Unified Payments Interface (UPI) from Rs. 1 lakh to Rs. 5 lakh per transaction. This announcement was made by RBI Governor Shaktikanta Das during the latest monetary policy statement.

"Currently, the transaction limit for UPI is set at Rs. 1 lakh, except for specific categories where a higher limit is allowed. We have now decided to raise the limit for tax payments through UPI to Rs. 5 lakh per transaction. This step will make tax payments easier and more accessible for consumers using UPI," Governor Das stated.

This decision follows the RBI's earlier move in December 2023, where the transaction limit for UPI payments to hospitals and educational institutions was similarly increased to Rs. 5 lakh, up from the previous limit of Rs. 1 lakh.

Introducing Delegated Payments through UPI

In addition to raising the transaction limit, the RBI has introduced a new feature called delegated payments on the UPI platform. This feature allows a primary user to authorize another individual, referred to as a secondary user, to make UPI transactions within a specified limit from the primary user’s bank account. The secondary user does not need to have a separate bank account linked to UPI, making this feature especially useful for families and small businesses.

"This new facility will expand the reach and utility of UPI, encouraging more users to adopt digital payments," added Governor Das.

GDP Growth Forecast

The RBI also maintained its key interest rate, the repo rate, at 6.5 percent and retained its real GDP growth forecast for the financial year 2025 at 7.2 percent. The forecast for the first quarter (Q1) was slightly revised down to 7.1 percent from the earlier projection of 7.3 percent, while the forecasts for the remaining quarters of the year remain unchanged: 7.2 percent for Q2, 7.3 percent for Q3, and 7.2 percent for Q4. The GDP growth projection for the financial year 2026 is also set at 7.2 percent.

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