Parliament Clears Tax Bill, UPI to Remain Free for Users

Parliament has cleared the Taxation and Other Laws (Amendment) Bill, 2026, which includes changes to the legal framework governing digital payment charges. The government has clarified that the amendment does not introduce transaction charges for UPI users.

Consumers making UPI payments will continue to pay no transaction charges, while all person-to-person transactions will remain free. The government has also indicated that the vast majority of merchant transactions will continue without charges.

The amendment to the Payment and Settlement Systems Act, 2007 creates an enabling framework under which the government can determine which electronic payment modes receive zero-charge protection.

If Merchant Discount Rate charges are introduced in future, the government has said they would apply only to a limited category of merchant transactions above a specified threshold and at a nominal rate.

The move seeks to balance continued UPI adoption with the need to fund payment infrastructure, cybersecurity, fraud prevention and system resilience.

UPI processed around 2,366 crore transactions worth ₹29.9 lakh crore in July 2026, highlighting the growing scale of India’s digital payments ecosystem.