INCOME TAX25 Sept 2026
UPI payments above ₹2,000: Who will pay the 0.4% MDR? FM Sitharaman clarifies | Mint
From 15 October 2026, a 0.4% Merchant Discount Rate (MDR) applies to certain UPI merchant payments above ₹2,000. The Finance Minister clarified on 25 September that merchants pay this, not customers, and the money does not go to the government. Person-to-person UPI stays free, about 96% of merchant transactions stay unaffected, and small merchants collecting up to ₹1 lakh monthly are exempt.
Key Statutory Highlights
- The 0.4% MDR starts on 15 October 2026 for specified person-to-merchant UPI payments above ₹2,000, and is capped at ₹300 for transactions of ₹75,000 or more.
- Person-to-person UPI payments will remain free, and about 96% of merchant UPI transactions will remain unaffected.
- Small merchants with monthly UPI QR collections of up to ₹1 lakh are exempt from the new MDR.
Actionable Advice for Taxpayers / Founders:If you run a business, review your monthly UPI QR collections and any payments above ₹2,000, and check with your bank or a CA whether the new MDR applies to you before 15 October 2026.
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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