The Reserve Bank of India (RBI) has proposed an increase in the Unified Payments Interface (UPI) limit for tax payments, raising it from ₹1 lakh to ₹5 lakh.

The proposed hike will enable taxpayers to settle higher tax dues directly through UPI.

Unlike payments made via debit or credit cards, UPI transactions generally do not incur additional charges.

This makes UPI a more economical choice for tax payments, reducing the overall cost for taxpayers who might otherwise face extra fees.

The RBI’s proposal follows a similar increase in December 2023 when the limit for certain payments, such as those to hospitals and educational institutions, was raised to ₹5 lakh.

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