Lok Sabha Passes Bill To Authorise Govt To Allow Fees On UPI Transactions: Who Will Be Charged And Who Is Exempt

Rajiv Kumar, New Delhi: The Lok Sabha has passed a bill amending tax rules to clear the way for levying fees on Unified Payments Interface (UPI) transactions. While the bill does not specify which UPI-related transactions will be charged or what those rates will be, the Finance Ministry and industry experts said that detailed fee structures and guidelines will be determined by the Reserve Bank of India (RBI) and the National Payments Corporation of India (NPCI).

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No Fees on P2P UPI Transactions; P2M Payments Above Rs 2,000 May Attract Charges

According to sources cited by Jagran.com, person-to-person (P2P) UPI transactions will remain free. However, a fee may be levied on person-to-merchant (P2M) and merchant-to-merchant (M2M) transactions. The recently passed tax amendment bill does not specify exact fee rates. While the Reserve Bank of India (RBI) and National Payments Corporation of India (NPCI) have yet to make final decisions, experts suggest that charges will apply to very few transactions.

FY 2025-26 UPI Transaction Breakdown

- Overall Volume: According to Finance Ministry data, a total of 24,161.69 crore transactions were processed through UPI in FY 2025–26, with a combined value of Rs 314 lakh crore.

- P2P Share: P2P transfers accounted for 71 per cent of the total transaction value (Rs 314 lakh crore). Within P2P transfers, 59 per cent were between Rs 0 and Rs 500, while 20 per cent exceeded Rs 2,000.

- P2M Share: P2M transfers accounted for the remaining 29 per cent of total transaction value, with 59 per cent of these merchant payments falling in the Rs 0 to Rs 500 range.

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What's In The Bill?

The bill seeks to amend the Payment and Settlement Systems Act, 2007, which currently prohibits banks and financial institutions from charging fees on UPI transactions.

Industry experts estimate that banks incur roughly Rs 10,000 crore annually to operate the UPI services. With over 700 banks and financial institutions now offering UPI services, sources indicate that introducing transaction fees could help them strengthen the system's operational framework and fund cybersecurity upgrades.