Proposed Bill reopens the door to MDR on UPI payments
The Taxation and Other Laws (Amendment) Bill, 2026 would allow the government to specify which digital payment modes remain exempt from merchant charges. It does not impose MDR on UPI now, but could enable differentiated treatment, including for larger merchants, through a future notification.
The government’s proposed Bill would let it decide which electronic payment modes remain exempt from merchant charges, reopening debate on MDR for UPI, particularly for large merchants. It does not immediately impose MDR on UPI.
Why this matters
The proposal follows recent signals that a Finance Ministry bill could enable MDR on select UPI merchant payments and that the tax bill removes the blanket zero-MDR bar for UPI and RuPay debit payments.
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