New Delhi3 hours ago
- Copy link
In 2021, the government started the scheme to give an insertion on transactions from UPI.
There will be no tax on UPI (Unified Payments Interface) transactions worth more than Rs 2,000. The Finance Ministry on Friday described the matter of imposing GST (Goods and Services Tax) at transactions of more than Rs 2,000.
The ministry said that reports of imposing GST are completely wrong and without base. Since January 2020, the MDR (merchant discount rate) on UPI’s P2M (Person to Merchant) transaction is zero. Therefore, GST does not apply to these.
Incentive scheme was extended for one year on March 19
On March 19, the central government extended the incentive scheme for one year to promote the Unified Payment Interface (UPI). This scheme will continue till 31 March 2026 and it will cost around Rs 1,500 crore.
This decision was taken in the Union Cabinet. Union Minister Ashwini Vaishnav said that in this scheme, small shopkeepers will get 0.15% incentives for transacting Person to Merchant (P2M) up to Rs 2,000 through RuPay Debit Card and BHIM-UPI.
Person to merchant UPI transaction means UPI transaction is done between the businessman and the customer. This scheme is applicable from 1 April 2021. Promoting RuPay Debit Card will have a direct impact on global payment company visas and master cards.
Union Minister giving information related to plans after the cabinet meeting.
Understand how shopkeepers will get incentives
- If the customer buys goods worth 2000 rupees and pays from UPI, then the shopkeeper will get an incentive of 3 rupees. At the same time, banks will also get incentives. The government will give 80% of the claims of banks immediately. Banks will get 20% of the remaining amount left when the bank’s technical fault is less than 0.75%. The bank’s system uptime will be more than 99.5%.
- Under the scheme, the government gives banks a percentage of transactions done through the Rupay and BHIM-UPI system. Aquarring bank means all banks or financial institutions that process credit or debit card payment for traders.
20,000 crore transaction target
The government is working to promote digital payment. The Union Minister informed that the government aims to complete 20,000 crore transactions in FY 2025-26. Also, UPI has to be promoted to small cities and villages.
Previously, merchant discount rate on Rupay Debit Card and BHIM-UPI transactions was zero. Now, with this new incentive scheme, shopkeepers will be promoted to get UPI payment.
He told that, ‘UPI payment is easy, safe and fast payment service for shopkeepers. Also, money without any extra charge comes directly into the bank account.
NCPI operates UPI
RTGS and NEFT payment system operations in India are with RBI. The National Payment Corporation of India (NPCI) operates systems like IMPS, Rupay, UPI. The government had a zero-charge framework mandator for UPI transactions from 1 January 2020.
How does UPI work?
For UPI service, you have to prepare a virtual payment address. After this it will have to link to the bank account. After this, there is no need to remember your bank account number, bank name or IFSC code etc. The payment bus processes the payment request according to your mobile number.
If you have its UPI ID (e-mail ID, mobile number or Aadhaar number), then you can easily send money through your smartphone. Net banking, credit or debit card will not be required not only for money but also for utility bill payment, online shopping, shopping etc. You can do all this work with unified payment interface system.
Special things related to UPI
- UPI System Transfers Real Time Fund
- For sending money to someone, you will only need its UPI ID (a virtual identity like email address, mobile number, Aadhaar number).
- With the UPI ID, you will not need to get information about the beneficiary’s name, account number, bank etc. to transfer funds. The amount is transferred using the IFSC code and mobile number.
- The UPI is developed on the model of IMPS. That is why you can do 24*7 banking with this app.
- OTP, CVV code, card number, expiry date etc. will not be required to shop online from UPI.
- A mobile application can be transacted with several bank accounts.
Also read … Now UPI will have a tax payment of up to ₹ 5 lakh: Users will be able to pay up to 5 lakhs in hospitals and educational institutions too
Indian taxpayers will now be able to make tax payments up to Rs 5 lakh through UPI. Till now this limit was 1 lakh rupees. This facility has been introduced in the National Payment Corporation of India (NPCI) Unified Payments Interface (UPI) from 16 September. The government issued a circular for this on 24 August. Read full news here …
