Taxation bill clears Parliament, UPI MDR rate unset

The Rajya Sabha passed The Taxation and Other Laws (Amendment) Bill, 2026 by voice vote on 10 August, completing Parliament’s approval after the Lok Sabha had cleared it earlier in the session. It is a money bill, so the Upper House could only recommend changes, not reject or amend the text.

Finance Minister Nirmala Sitharaman set out what the bill actually does. It amends Section 10A of the Payment and Settlement Systems Act, 2007. In her words, the amendment is an enabling provision, it does not impose any tax or transaction charge on UPI users, and it lets the government specify by notification which electronic payment modes keep statutory protection against charges. Parliament has removed the blanket bar. It has not set a fee.

On person to person payments, Sitharaman re-assured the House that no MDR framework has yet been finalised and that end customers will not bear a separate charge on UPI transactions. The decision now sits with the UPI and Services Steering Committee, headed by NPCI, which will consider whether any MDR is introduced and, if so, its scope and structure. RBI Governor Sanjay Malhotra said last week that talk of imposing the fee is still at a premature stage, while noting that someone ultimately pays for a transaction.

The list of things that still do not exist is longer than the list of things that do. There is no notified rate, no start date, no confirmed merchant turnover cut-off and no committee decision. Inc42 reported last month that the Centre was weighing 0.05% to 0.07% on UPI transactions above Rs 2,000 for merchants with annual turnover of Rs 1 Cr to Rs 1.5 Cr. That remains a proposal under consideration, not policy.

For a D2C brand the practical step is measurement, not repricing. Pull your last 90 days of UPI P2M settlement and split it two ways: share of order value above Rs 2,000, and your registered annual turnover against the Rs 1 Cr and Rs 1.5 Cr bands. Those two numbers give you your exposure under the range reported so far. Watch the NPCI committee rather than Parliament from here. The legislature has finished its part.