GENERAL20 Sept 2026
The ₹1-lakh question: When does a small UPI merchant stop being 'small'?
Small merchants who get up to ₹1 lakh a month through eligible UPI QR payments stay outside the new MDR, or merchant discount rate, charge. That means no 0.4% fee for now. But if your monthly receipts cross that limit again and again, you may be reclassified to P2M. Keep an eye on your monthly UPI collections.
Key Statutory Highlights
- Merchants receiving up to ₹1 lakh a month in eligible UPI QR payments remain outside the new MDR regime.
- Merchants classified as Person-to-Person-Merchant (P2PM) can keep accepting UPI payments without paying the new 0.4% MDR.
- Repeated breaches of the monthly limit can trigger reclassification to P2M.
Actionable Advice for Taxpayers / Founders:Track your monthly UPI QR collections so you know whether you are staying within the ₹1 lakh limit, and if your receipts regularly cross it, speak to a tax professional about what reclassification could mean for 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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