INCOME TAX24 Sept 2026
UPI MDR kicks in October 15: Why NPCI expects no hit to transaction volumes | Mint
From October 15, a 0.4% Merchant Discount Rate (MDR) applies to person-to-merchant Unified Payments Interface (UPI) payments above ₹2,000, capped at ₹300. Payments up to ₹2,000, person-to-person transfers and small zero-MDR merchants stay exempt. NPCI's chief expects no real drop in volumes, with this revenue going back into soundboxes and AI. Check whether your business is covered.
Key Statutory Highlights
- A 0.4% MDR will apply from October 15 on person-to-merchant UPI transactions above ₹2,000, with the charge capped at ₹300 for transactions of ₹75,000 and above.
- Person-to-person transfers, person-to-merchant payments up to ₹2,000, and small merchants covered under the zero-MDR structure remain outside the new charge.
- Railways, telecommunications, insurance, fuel and agricultural inputs will attract a flat MDR of ₹5 per transaction for payments above ₹2,000.
Actionable Advice for Taxpayers / Founders:Check your UPI collections: if you regularly receive person-to-merchant payments above ₹2,000, review your pricing from October 15 so the small MDR cost does not catch you by surprise. Note that banks have been directed not to pass MDR on to customers.
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
Share: