UPI Payments: Here’s How You Can Change UPI Transaction Limit

The National Payment Corporation of India (NPCI) recently increased the per-transaction limit for certain categories on the Unified Payments Interface (UPI) making it possible to transact up to Rs 5 lakh per day.

UPI is a popular transaction gateway used in India (and abroad) for small (day-to-day) to big transactions by individuals and merchants.

In a circular dated August 24, NPCI stated, "With UPI emerging as a preferred payment method, there is a need to enhance the per transaction limit in UPI for specific categories. In view of the above the per transaction value limit in UPI has now been enhanced to Rs 5 lakh for entities under categories aligned to tax payments."

The new transaction limit is applicable starting September 16, 2024 (today) allowing individuals to use UPI to pay taxes up to Rs 5 lakh per transaction.

However, you still need to make sure your bank and UPI apps support these higher limits. Different banks have set up their limits, most often capping UPI transactions at Rs 1 lakh per day for peer-to-peer (P2P) payments.

Here’s How You Can Change Your UPI Transaction Limit:

1. Check Your Bank’s UPI Limit: Since each bank has set its own transaction limit, you should first check what your bank allows. For example, HDFC and ICICI Bank allow daily transaction limits up to Rs 1 lakh while there are some which cap it lower than that.

You can view your current limit by:

- Checking your bank’s website or mobile banking application

- Go to your UPI app, and check under the ‘Bank Account’ section what the limit is mentioned here.

2. Put A Limit Increase Request: Once you have established what the current limit is, contact your bank directly or visit the nearest branch to put in a limit increase request.

Some banks even allow you to increase limits using their mobile apps or net banking applications.

Things to remember:

- Limits vary significantly based on your bank’s policies. For example: Allahabad Bank's UPI transaction limit is capped a Rs 25,000 while Kotak Bank allows Rs 1 Lakh.

- For higher transactions, make sure the merchants are verified to process these payments (like Rs 5 Lakh for taxes).

- Starting today, (Monday, September 16), the updated UPI limit will also be applicable for transactions such as hospital expenses, educational institutions, IPOs, and RBI retail direct schemes.

Earlier, the NPCI had directed banks, payment service providers, and UPI apps to make sure the new transaction limit is implemented by Sunday, September 15, 2024.

According to a report by the Economic Times, they have also been asked to abide by MCC 9311's strict merchant categorisation rules. This includes extensive verification and due diligence. Such companies/merchants must also accept UPI as a payment mechanism for the higher limit, especially for tax payments.