During the Monetary Policy Committee (MPC) meeting, the Reserve Bank of India (RBI) proposed to increase the upper limit for tax payments through the Unified Payments Interface (UPI) from Rs 1 lakh to Rs 5 lakh per transaction. 

This change aims to smoother high-value tax transactions and ease consumer tax payments through UPI. Additionally, the RBI plans to introduce delegated UPI payments and continuous cheque clearing in the Cheque Truncation System to enhance the digital payment systems in India.

The Cheque Truncation System (CTS), also known as the Image-based Clearing System, was introduced in India as a project by the Reserve Bank of India in 2010.

The primary objective of this system is to facilitate faster cheque processing and clearing, thereby reducing the time and inefficiencies associated with the traditional paper-based clearing process. As a result, it reduces the time taken for funds to be credited or debited from the respective bank accounts.

RBI governor Shaktikanta Das announced that the transaction limit for UPI is currently Rs 1 lakh, except for some payments with higher limits. The limit for tax payments via UPI will be increased from Rs 1 lakh to Rs 5 lakh per transaction, making it easier for consumers to pay their taxes through UPI. 

Following this announcement, Dilip Asbe, managing director and CEO of the National Payments Corporation of India (NPCI), which operates UPI, shared his thoughts on Twitter, stating, “Never a dull moment for payment systems in India.”

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