The Reserve Bank of India (RBI) has taken a significant step towards promoting digital payments by enhancing the limit for tax payments through the Unified Payments Interface (UPI). In his monetary policy statement, RBI Governor Shaktikanta Das announced that the transaction limit for UPI payments, currently capped at ₹1 lakh, has been increased to ₹5 lakh per transaction for tax payments. This move aims to further ease the process of making tax payments for consumers using UPI.
It is noteworthy that the RBI had previously raised the UPI transaction limit for payments to hospitals and educational institutions to ₹5 lakh in December 2023, from the earlier limit of ₹1 lakh.
In a further push towards digital financial inclusion, the RBI has introduced a novel facility for delegated payments through UPI. This new feature will allow primary users to authorize secondary users to make UPI transactions from their bank accounts, up to a limit set by the primary user. Importantly, the secondary user does not require a separate bank account linked to UPI. This innovation is expected to significantly expand the reach and usage of digital payments, particularly UPI.
Alongside these announcements, the RBI has maintained its real GDP growth forecast for FY25 at 7.2 percent. The forecast for the first quarter (Q1) of FY25 has been marginally revised down to 7.1 percent from the earlier projection of 7.3 percent. However, the central bank has retained the GDP growth forecasts for Q2 at 7.2 percent, Q3 at 7.3 percent, and Q4 at 7.2 percent. The GDP growth forecast for FY26 remains at 7.2 percent.
The RBI’s decision to enhance the UPI limit for tax payments and introduce delegated payments is expected to further propel the adoption of digital payments in India. These initiatives are in line with the government’s vision of a digital economy, promoting financial inclusion and convenience for citizens.
