New Delhi, Aug 11 (APAC Media): Parliament on Monday passed the Taxation and Other Laws (Amendment) Bill, 2026, with Finance Minister Nirmala Sitharaman assuring consumers that they will not have to pay any transaction charge on UPI payments.
The Rajya Sabha passed the bill through a voice vote after a brief discussion and the finance minister’s reply. The legislation had earlier been cleared by the Lok Sabha.
Sitharaman said the amendment does not impose any tax or transaction fee on UPI and that consumers would continue to use the digital payments system free of charge.
“Will the consumer pay any UPI charge? No. UPI has remained free for consumers since its launch, and every Indian will continue to make this instant digital without paying any transaction charge,” she said.
The clarification came amid concerns that amendments to the Payment and Settlement Systems Act, 2007, could pave the way for the introduction of a Merchant Discount Rate (MDR) on UPI transactions.
Sitharaman, however, said no MDR framework has been finalised yet. She said the UPI and Services Steering Committee, headed by the National Payments Corporation of India (NPCI), would consider whether MDR should be introduced and, if so, determine its scope and structure.
The amendment to Section 10A of the Payment and Settlement Systems Act provides the government with the power to specify, through notification, which electronic payment systems or transactions should remain protected from charges.
At present, banks and payment system providers cannot directly or indirectly charge consumers for UPI and RuPay debit card transactions under the zero-MDR framework.
Sitharaman also said any potential MDR would be considered in the context of merchant transactions and would not result in charges for consumers.
The finance minister said UPI had emerged as the world’s largest real-time payment system. In July 2026, it processed 2,366 crore transactions worth Rs 29.9 lakh crore, she said.
The Taxation Bill also seeks to promote foreign investment, encourage domestic electronics manufacturing and facilitate greater use of Indian data centres by overseas cloud service providers.
The legislation further replaces an earlier ordinance concerning income-tax exemptions for certain interest income and capital gains earned by foreign portfolio investors from investments in government securities.
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Disclaimer: This article is for informational purposes only. APAC Media is not liable for any investment decisions or losses. Please conduct your own research or consult a financial advisor before investing.
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