Will UPI Payments Above ₹2000 Be Taxed? Government Issues Clarification

Business:Recently, a news was becoming increasingly viral on social media, in which it was claimed that if a person pays more than Rs 2000 through a unified payment interface (UPI), then he would be taxed. After this news came to light, there was confusion among many people. Especially anxiety increased among those who do digital transactions daily.

But now the government has clarified the situation by issuing an official statement on this entire matter. The Finance Ministry claimed that such reports are misleading, false and baseless. The ministry says that the government does not have any such proposal under consideration to impose tax on UPI payment.

What does the government say?

The Finance Ministry said in its statement that reports of imposing GST on UPI transactions worth more than Rs 2000 are completely wrong. The government is not going to take any such decision at the moment. The ministry has clearly stated that it wants to promote digital payment, not to discourage people by taxing it.

The purpose of UPI is that people adopt cashless transactions and strengthen the Digital India campaign. In such a situation, the government was not even thinking of putting any extra burden on UPI transactions.

What is MDR?

A word often comes in this context - MDR means merchant discount rate. Earlier this charge used to be imposed on the customer-to-trade (P2M) payment made through UPI, but it has been removed since January 2020. When there is no MDR, there is no question of imposing GST on it.

Increasing use of UPI

The popularity of UPI transactions in India is increasing day by day.
According to the Ministry of Finance,

• The total UPI transaction in FY 2019-20 was Rs 21.3 lakh crore.
• By March 2025, this figure has reached Rs 260.56 lakh crore.

People have now increased confidence in digital payments. People are using UPI from shopping, restaurant bill, grocery store to online services.

Not only this, India's UPI system is now being appreciated internationally as well. It has expanded in many countries and foreign tourists are also able to come to India and pay through UPI.

 The government has completely rejected this rumor

If you too were upset after seeing the news spread on social media, claiming that UPI payment of more than 2000 rupees would be taxed, then now be sure. The government has completely rejected this rumor. In such a situation, there is no need for any kind of nervousness while making digital payment.

The UPI is completely tax-free and the government is committed to promoting it.