Bill allowing UPI charges passed

New Delhi: Lok Sabha on Thursday passed a Bill to amend the Payment and Settlement Systems Act, 2007 that authorises the government to permit banks and other service providers to levy charges on payments through unified payments interface (UPI) and other notified electronic payment modes. The amendment passed by the House without discussion amid din seeks to remove the existing legal provision that prevents banks and payment service providers from charging Merchant Discount Rate (MDR) on notified electronic payment modes.

Real-time payments made through RTGS and NEFT are done by paying a service charge. However, UPI transactions have been exempted from such charges so far.

The proposed changes in Payment and Settlement Systems Act is a part of comprehensive legislation on taxation, which was introduced in the House on Tuesday. The Bill was passed through voice vote in the Lok Sabha after the House resumed at 2 pm after the earlier adjournment.

As soon as the House re-assembled, Finance Minister Nirmala Sitharaman moved the Taxation and Other Laws (Amendment) Bill, 2026 further to amend the Payment and Settlement Systems Act, 2007 and the Income Tax Act, 2025, and to amend the Finance Act, 2026, to be taken into consideration.