INCOME TAX21 Sept 2026
UPI MDR on mutual funds: Experts explain how investors could bear the charge and its impact on returns | Mint
From 15 October 2026, UPI payments for mutual funds and other capital-market transactions will carry a 0.02% Merchant Discount Rate (MDR), capped at ₹300 per transaction. The charge is meant to be borne by the merchant, not you. But experts say it could be passed on to investors who choose UPI, slightly trimming returns. Check with your platform how they will collect it.
Key Statutory Highlights
- From 15 October 2026, a 0.02% MDR applies to UPI payments for mutual funds and other capital-market transactions, capped at ₹300 per transaction.
- The charge is meant to be borne by the merchant, as the acquiring bank deducts it when settling funds with the asset management company or platform.
- If passed on, the MDR is treated as a transaction-level cost for investors who use the UPI route, and it will not affect the fund's expense ratio.
Actionable Advice for Taxpayers / Founders:Ask your mutual fund platform or AMC how they plan to handle this MDR on UPI payments, so you know whether your invested amount or a separate charge is affected.
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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