Lok Sabha Passes Bill Amending Payment Act to Allow Charges on UPI Transactions

Taxation and Other Laws (Amendment) Bill 2026 Allows MDR on UPI: Subsidy Falls to ₹2,000 Cr in FY27

UPI, currently free for users, may become chargeable after the government introduced the Taxation and Other Laws (Amendment) Bill, 2026. The Bill allows the government to notify transactions that can attract Merchant Discount Rate (MDR), potentially ending the zero-MDR regime. For students, this is a key economy/polity topic linking digital payments, financial inclusion, and fiscal policy.

Lok Sabha Passes Bill to End Zero MDR Guarantee for UPI; Govt Can Now Notify Charges on Merchants

The Taxation and Other Laws (Amendment) Bill, 2026, passed without debate, removes the statutory zero-MDR guarantee for UPI, allowing the government to impose charges on merchants. This affects 55 crore users and the digital payments ecosystem. The Bill also provides 15-year tax exemptions for foreign electronics manufacturers and simplifies rules for fund managers, raising concerns about asymmetry between domestic and foreign stakeholders.

Govt Allows MDR on UPI Transactions Above Rs 2,000; Paves Way for Charges on P2M Payments

The government has notified that UPI transactions above Rs 2,000 are no longer exempt from fees, creating legal room to impose Merchant Discount Rate (MDR) on high-value person-to-merchant payments. This shift aims to make the UPI ecosystem financially sustainable, but could affect 66% of UPI transaction value and alter consumer payment behavior.

Rajya Sabha Passes Bankers' Books Evidence Bill 2026, Replaces British-Era Law with Digital Evidence Framework

Parliament has passed The Bankers' Books Evidence Bill, 2026, replacing the 1891 British-era Act. The new law allows digital and virtual records as admissible evidence, aligning banking evidence with modern practices. It also enables the government to extend the framework to NBFCs and fintech firms via notification.

President Assents to Taxation Act Amendment 2026 and Payment Systems Act Amendment; Replaces June 5 Ordinance on FPI G-Sec Tax Exemption

President Droupadi Murmu has assented to two key Acts: the Taxation and Other Laws (Amendment) Act, 2026, which replaces the June 5 ordinance granting income tax exemption to FPIs on G-Sec investments, and an amendment to the Payment and Settlement Systems Act, 2007. These reforms aim to boost foreign investment and modernize payment systems, relevant for Economy and Banking exams.

RBI Net Sells $14.9 Bn (Jan-May 2026) for Rupee Stability; FCNR(B) Swap, ECB Boost Inflows

RBI's net sale of $14.9 billion in the first five months of 2026 underscores its interventionist approach to curb excessive rupee volatility, a key topic for economy-focused exams. The accompanying measures like the FCNR(B) swap facility and ECB liberalisation are crucial for understanding forex management and capital inflows.

SC to Hear PIL Against 0.4% MDR on UPI Transactions Over ₹2000 from Oct 15

The Supreme Court will hear a PIL on September 28, 2026 challenging the government's decision to impose a 0.4% Merchant Discount Rate (MDR) on UPI person-to-merchant transactions above ₹2,000, effective October 15. The PIL alleges the framework lacks transparency and is arbitrary, questioning amendments to Section 10A of the Payment and Settlement Systems Act.

Rajya Sabha Passes Appropriation Bill 2026 for ₹54,067 Cr Excess Expenditure (FY2022-23)

Rajya Sabha has cleared the Appropriation Bill, 2026, authorising ₹54,067.44 crore in excess expenditure from the Consolidated Fund of India for FY 2022-23. Two demands covered: ₹53,871 crore for debt repayment and ₹196.44 crore per a Railway Ministry court order. This is a key procedural event in parliamentary financial control every student of Indian polity must understand.