3 weeks ago
Sitharaman: No UPI charges as Parliament clears tax Bill
In India, people use a phone app system called UPI to send money instantly and for free.
India's Finance Minister, Nirmala Sitharaman, said UPI will stay free for everyone who uses it.
She promised that small shopkeepers, like vegetable vendors and tea stall owners, will not have to pay any charges either.
The government also passed a new law called the Taxation and Other Laws (Amendment) Bill.
The Finance Minister said this law does not add any new tax or fee for UPI users.
A committee might think about charging fees for very large business payments in the future, but nothing has been decided yet.
Most everyday payments, like buying milk and vegetables, will stay free.
Some leaders in Parliament argued about the law and said it was brought because of pressure from the US, but the Finance Minister said they were spreading confusion.
In July 2026 alone, people made over 2,300 crore UPI payments.
UPI works in 11 countries, and India is proud that it is the world's largest real-time payment system.
Finance Minister Nirmala Sitharaman said consumers and small merchants, including vegetable vendors and tea stall owners, will not pay any charges on UPI transactions.
Parliament approved the Taxation and Other Laws (Amendment) Bill, 2026 after the Rajya Sabha returned it by a voice vote on Monday, August 10.
The Bill amends Section 10A of the Payment and Settlement Systems Act, 2007 as an enabling provision that imposes no tax or transaction charge on UPI users.
The UPI and Services Steering Committee, headed by NPCI, will decide whether any Merchant Discount Rate should be introduced; no MDR framework has been finalised, and any future MDR would apply only to high-value merchant transactions.
UPI processed 2,366 crore transactions worth ₹29.9 lakh crore in July 2026 and is available across 11 countries, making it the world's largest real-time payment system.
- Who
- Finance Minister Nirmala Sitharaman, the Indian Parliament (Lok Sabha and Rajya Sabha), and Opposition MPs including CPI(M)'s John Brittas and AAP's Sanjay Singh
- What
- Parliament cleared the Taxation and Other Laws (Amendment) Bill, 2026, with Sitharaman assuring that UPI remains free for consumers and small merchants; the Rajya Sabha also passed the Bankers' Books Evidence Bill, 2026
- Where
- Rajya Sabha, Parliament of India, New Delhi
- When
- Monday, August 10, 2026
- Why
- To reassure UPI users that no transaction charges will be imposed, support financial inclusion, and attract more foreign capital through tax concessions
Opposition lawmakers
Government and Finance Minister
Pressure over UPI fees
Opposition lawmakers
CPI(M) MP John Brittas alleged the government decided to charge fees on UPI payments because of pressure from the US, a move he said goes against PM Modi's assertion that India's digital payment ecosystem is a free public good.
Government and Finance Minister
Finance Minister Sitharaman said the enabling provision imposes no tax or transaction charge on UPI users and accused Brittas of spreading confusion over UPI payment fees.
Alleged pressure from Donald Trump
Opposition lawmakers
AAP MP Sanjay Singh claimed the Bill was brought under pressure from US President Donald Trump because Indians had stopped using Visa and Mastercard, and called Sitharaman's clarification contradictory and misleading.
Government and Finance Minister
Sitharaman reiterated that consumers and small merchants will not pay MDR charges and that the Bill is only an enabling provision that imposes no tax or transaction charge on UPI users.
Debate conduct in the Rajya Sabha
Opposition lawmakers
Opposition MPs, who wanted to raise the alleged Ram temple donation theft and police action on protesters, walked out after the Chair said members should speak only on the Bill.
Government and Finance Minister
Sitharaman called the Opposition walkout 'sad' and termed communists in India 'total cowards' who 'blast everybody with not facts' and cannot face replies.
Key facts
- Announcement
- No charges on UPI for consumers and small merchants
- Bill approved
- Taxation and Other Laws (Amendment) Bill, 2026
- Law being amended
- Section 10A, Payment and Settlement Systems Act, 2007
- Future MDR
- No MDR framework finalised; any MDR would apply only to merchant transactions above a prescribed threshold
- July 2026 UPI volume
- 2,366 crore transactions
- July 2026 UPI value
- ₹29.9 lakh crore
- Countries with UPI
- 11
- Also passed
- Bankers' Books Evidence Bill, 2026 (electronic banking records admissible as evidence)
Quotes
CPI(M) MP John Brittas
Member of Parliament from Communist Party of India (Marxist)
“Although the Finance Minister clarified that there will be no tax on UPI payments from small traders, this is a very contradictory and misleading statement as earlier she said a committee would be formed to decide how much tax to take from traders.”
thestatesman.com
“"UPI has remained free for consumers since its launch, and every Indian will continue to make instant digital payments without paying a transaction charge," she said”
financialexpress.com
Sources
Parliament clears Taxation Bill; FM says no charges for UPI users
Parliament clears Taxation and Other Laws (Amendment) Bill; Sitharaman assures no UPI charges for users, small merchants
Consumers & small merchants will not have to pay any charges on UPI transactions, says FM Sitharaman
UPI Users Will Not Pay Charges As Parliament Passes Taxation Amendment Bill: FM Nirmala Sitharaman
Consumers won’t pay UPI charge, says FM Sitharaman as Parliament clears tax Bill
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