GENERAL17 Sept 2026
Complex priorities: On UPI transactions, MDR charges
From October 15, UPI payments of ₹2,000 or more to merchants will carry Merchant Discount Rate (MDR) charges set by NPCI. Small merchants earning under ₹1 lakh a month stay exempt, while essential sectors get flat rates instead of 0.4%. It covers only about 2.5% of UPI transactions, but the complex rules worry merchants, so wait for clarity before changing your setup.
Key Statutory Highlights
- From October 15, the new MDR charges apply only to UPI payments of ₹2,000 or more made at merchants.
- UPI payments to small merchants earning less than ₹1 lakh a month are exempt, while merchants in certain essential sectors pay a flat MDR instead of the 0.4% charged in other sectors.
- The government has told banks to make sure merchants do not pass this charge on to customers.
Actionable Advice for Taxpayers / Founders:If you accept UPI, note the October 15 rollout and review your billing and record-keeping now, since it is still unclear how the ₹1 lakh monthly limit will be tracked. It is worth checking with your CA once NPCI issues clarifications, rather than changing prices immediately.
Statutory Disclaimer: TaxQue Shorts are AI-assisted editorial briefs for compliance awareness. This brief has not passed every source check; confirm the original notification before acting. This does not constitute formal legal or CA counsel.
TaxQue News Desk
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