UPI PAYMENT CHARGES FROM OCTOBER 15: WHAT PHONEPE, GOOGLE PAY, PAYTM & AMAZON PAY USERS NEED TO KNOWHubli, Karnataka | September 17, 2026There has been a lot of discussion on social media about a new “UPI tax” on payments made through apps such as PhonePe, Google Pay, Paytm, Amazon Pay and WhatsApp Pay.But here is the important clarification: the government is not imposing a direct tax on ordinary UPI users.Parliament passed the Taxation and Other Laws (Amendment) Bill, 2026, which included an amendment to the Payment and Settlement Systems Act, 2007. The amendment created an enabling framework for charges on certain digital payment transactions. (News on AIR)According to the latest government clarification, from October 15, 2026, a 0.4 percent Merchant Discount Rate, or MDR, will apply to specified person-to-merchant UPI transactions above ₹2,000.For transactions of ₹75,000 or more, the MDR will be capped at ₹300 per transaction. (Press Information Bureau)For example, if a qualifying merchant transaction is ₹10,000, the MDR at 0.4 percent would be ₹40.But the most important point is this:Customers will not have to pay this MDR separately.Person-to-person UPI transfers will remain completely free, regardless of the amount. UPI merchant payments up to ₹2,000 will also remain free. The government says approximately 96 percent of merchant UPI transactions will remain unaffected. (Press Information Bureau)There are also special provisions for small merchants. Merchants receiving up to ₹1 lakh per month through UPI QR under the specified small-merchant category will continue to have zero MDR. (Press Information Bureau)For certain essential sectors such as railways, telecom, insurance, fuel and agricultural inputs, qualifying transactions above ₹2,000 will attract a flat ₹5 MDR.For capital-market related payments, including mutual funds and securities, the MDR is 0.02 percent, capped at ₹300. (Press Information Bureau)So, whether you use PhonePe, Google Pay, Paytm, Amazon Pay or another UPI application, the key message is:There is no new direct UPI tax for ordinary users.This new MDR is a charge within the merchant payment ecosystem and is not a tax collected by the government from consumers. (Press Information Bureau)For HDMC News, this is [MOHD SADIQ SAVANUR ], bringing you the latest update.
