UPI transaction limit

NPCI Raises UPI Transaction Limit to ₹5 Lakh: What You Need to Know!

Big news for UPI users! The National Payments Corporation of India (NPCI) has just increased the upper limit for certain UPI transactions to a whopping ₹5 lakh. This new limit is a game-changer for high-value payments like taxes, education fees, and IPO investments. Let’s dive into the details and see how this impacts your transactions.

UPI Transaction Limit Raised to ₹5 Lakh: The Breakdown

Unified Payments Interface (UPI) has been a revolutionary platform for digital payments in India, allowing quick and seamless transactions. Typically, UPI transactions have a general cap of ₹1 lakh per transaction. However, NPCI has raised the limit to ₹5 lakh for specific types of payments, providing greater flexibility for users who need to make high-value transactions.

According to NPCI’s circular dated August 24, 2024, the ₹5 lakh transaction limit will apply to payments made for:

• Tax payments
• Hospitals and educational institutions
• Initial Public Offerings (IPOs) and RBI’s retail direct schemes

Why Was the UPI Limit Increased?

With UPI becoming the go-to payment method for millions of Indians, NPCI identified the need for a higher per-transaction limit, particularly for sectors requiring large payments. By increasing the cap to ₹5 lakh, NPCI aims to simplify the payment process for users handling larger sums of money in specific categories like taxes and educational fees.

“With UPI emerging as a preferred payment method, there is a need to enhance the per transaction limit for specific categories,” said NPCI in its official circular.

When Will the ₹5 Lakh Limit Take Effect?

Mark your calendars! The increased UPI transaction limit will officially be available starting Monday, September 16, 2024. To ensure a smooth transition, NPCI has directed all banks, payment service providers, and UPI apps to comply with this new limit by Sunday, September 15, 2024.

What Should You Know About Bank-Specific UPI Limits?

While NPCI has set the upper limit for certain transactions at ₹5 lakh, individual banks can still impose their own transaction limits. Therefore, it’s crucial to check with your bank or UPI app provider to confirm whether this higher limit applies to your specific account or transaction type.

For example, Allahabad Bank currently allows UPI transactions up to ₹25,000, whereas HDFC Bank and ICICI Bank offer higher limits, allowing peer-to-peer transactions up to ₹1 lakh. Make sure to verify your bank’s policies before attempting a large transaction.

Types of UPI Transactions Eligible for ₹5 Lakh Limit

Here’s a quick rundown of the types of payments you can now make using UPI with the ₹5 lakh transaction limit:

1. Tax Payments: Whether you’re paying income tax or other taxes, UPI now allows high-value transactions up to ₹5 lakh.
2. Hospitals and Educational Institutions: Fees for hospitals or universities can now be paid in a single UPI transaction up to ₹5 lakh.
3. IPOs and RBI Retail Direct Schemes: Investors participating in Initial Public Offerings (IPOs) or RBI’s retail schemes can make large payments through UPI seamlessly.

How to Ensure a Smooth ₹5 Lakh UPI Transaction?

To ensure your high-value UPI transactions are processed without hiccups, NPCI recommends verifying the merchant before completing the transaction. Additionally, check with your bank and UPI app for daily limits and eligibility.

If your bank imposes a lower transaction limit, you may need to adjust your payment method or split the payment into multiple transactions.

Conclusion:

With the NPCI increasing UPI transaction limits to ₹5 lakh for high-value payments, users can now enjoy greater flexibility and convenience for crucial transactions like taxes, educational fees, and IPOs. This update is a testament to UPI’s growing role as a versatile, efficient, and user-friendly payment platform in India. Be sure to check with your bank to confirm your transaction limits and start making the most of UPI’s enhanced capabilities!

FAQs:

1.What is the new UPI transaction limit set by NPCI?

A. NPCI has increased the UPI transaction limit to ₹5 lakh for specific categories like tax payments, education, and IPOs.

2.When will the ₹5 lakh UPI limit come into effect?

A. The new UPI transaction limit will be available starting from Monday, September 16, 2024.

3.Which transactions are eligible for the ₹5 lakh limit?

A. Tax payments, payments to hospitals and educational institutions, and transactions related to IPOs and RBI retail schemes.

4.Can all banks offer UPI transactions up to ₹5 lakh?

A. Not necessarily. Individual banks can set their own UPI transaction limits. It’s best to check with your bank.

5.What is the current UPI limit for peer-to-peer transactions?

A. Banks like HDFC and ICICI allow peer-to-peer transactions up to ₹1 lakh, while others like Allahabad Bank have lower limits.

6.How can I verify if I can make a ₹5 lakh transaction?

A. Contact your bank or UPI service provider to check if your account is eligible for the increased limit.

7.Do all UPI apps support ₹5 lakh transactions?

A. Compliance depends on the UPI app and the bank. Check with your service provider for details.

8.What happens if my bank has a lower limit than ₹5 lakh?

A. If your bank’s limit is lower, you may need to split your transaction or use a different payment method.

9.Will this limit apply to international transactions?

A. No, the ₹5 lakh limit currently applies only to specific domestic transactions like taxes, education, and IPOs.

10.What is the previous limit for UPI transactions?

A. The general UPI transaction limit was ₹1 lakh, and for certain sectors like capital markets, it was ₹2 lakh.

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