GST on UPI Transactions: Recently, some news reports suggested that the Indian government might start charging Goods and Services Tax (GST) on UPI payments above ₹2,000. These reports claimed that a tax of 18% could be applied to higher-value digital transactions to improve tax compliance. However, the Ministry of Finance has strongly denied these claims, calling them completely false and without any basis.

GST on UPI Transactions:
On April 18, the Finance Ministry clarified that there is no proposal under consideration to impose GST on UPI transactions. It stated that GST is only applied to specific service charges like the Merchant Discount Rate (MDR). However, the MDR for person-to-merchant (P2M) UPI payments has already been removed since January 2020, meaning no GST applies to such transactions either.

The Indian government has been consistently working to promote digital payments and make them more accessible. To support UPI usage, especially for smaller transactions, an incentive scheme has been running since 2021. This program helps merchants by covering costs related to digital transactions and encourages wider use of UPI.

The government’s efforts are paying off. India has become a global leader in digital payments. According to a 2024 report, India made up 49% of all real-time digital transactions worldwide in 2023. UPI usage has grown rapidly—from ₹21.3 lakh crore in 2019-20 to ₹260.56 lakh crore by March 2025. P2M transactions alone reached ₹59.3 lakh crore, showing strong acceptance by both businesses and consumers.

In conclusion, the government has no plans to tax UPI payments above ₹2,000. The Finance Ministry has reassured citizens that these reports are incorrect. UPI continues to be a free and user-friendly platform, and the government remains committed to encouraging digital payments in India.

Also Read: PM Modi, Elon Musk Discuss Cooperation in Tech and Innovation

Share

• 
• 
• 
• 
• 
•