New Delhi: Parliament has passed the Taxation and Other Laws (Amendment) Bill, 2026, with Finance Minister Nirmala Sitharaman clarifying that the legislation does not impose any charge on consumers using UPI.
The Bill cleared the Rajya Sabha through a voice vote after being passed by the Lok Sabha. Sitharaman said UPI payments have remained free for consumers and will continue to remain so.
The legislation changes the legal framework governing Merchant Discount Rate, or MDR, for UPI, RuPay and other digital payments. While users and person to person transactions will remain free, the new framework could allow limited MDR on certain merchant transactions through a future government notification.
The Bill also introduces several tax measures aimed at attracting foreign investment and boosting domestic manufacturing. Tax benefits for foreign companies supplying equipment to Indian electronics manufacturers have been extended until 2040-41.
Additional provisions offer tax relief to foreign investors, data centre operators, diamond businesses and investment funds.
The government says the measures are intended to attract capital, strengthen electronics manufacturing and provide greater tax certainty.
For UPI users, the key message remains unchanged: the Bill does not make everyday UPI payments chargeable.
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