GENERAL25 Sept 2026
Government, banks to decide subsidy amount for UPI that will continue after MDR comes in
A Merchant Discount Rate (MDR) charge will start on UPI from October 15, with no plan to delay it. The government will talk to the Indian Banks' Association about how much subsidy continues, since MDR alone won't cover UPI's running cost. Officials also want to ensure merchants don't pass the charge to customers, and will explain this to traders so they keep accepting UPI.
Key Statutory Highlights
- The MDR charge on UPI goes live on October 15, and the government says there is no proposal to delay this date.
- The government has budgeted ₹2,000 crore this financial year for its incentive scheme for RuPay Debit Cards and low-value BHIM-UPI transactions.
- The Finance Ministry will hold talks with the Indian Banks' Association on how much subsidy should continue and on ways to ensure merchants do not pass MDR on to customers.
Actionable Advice for Taxpayers / Founders:If you accept UPI payments, keep accepting them for now. Wait for official word from the Finance Ministry or your bank before changing anything, and check with your CA if you are unsure how MDR may apply to your business.
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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