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12 August 2026

Rajya Sabha legislative business and UPI charges

The topic involves a specific legislative amendment to the Payment and Settlement Systems Act, 2007, which directly impacts digital payment policy and regulatory oversight of the UPI ecosystem.

1 min read Day 7 of 9 2 questions 1 prelims

Notes

  • Rajya Sabha passed the Bankers’ Books Evidence Bill and returned the Taxation and Other Laws (Amendment) Bill.
  • The Taxation and Other Laws (Amendment) Bill, 2026, includes an amendment to Section 10A of the Payment and Settlement Systems Act, 2007.
  • The amendment empowers the government to notify charges on specified electronic payment modes.
  • Proposed Merchant Discount Rate (MDR) for UPI transactions above ₹2,000 is 0.25–0.5%.
  • Government states that while the threshold covers roughly 65% of transaction value, it impacts only 5% of transactions by volume.
  • Finance Ministry maintains UPI will remain free for consumers, with low-value transactions for small vendors unaffected.
  • UPI was launched in 2016 with a zero-MDR regime to promote a less-cash economy.
  • Economic concerns include the potential for MDR to be absorbed by banks/PSPs, potentially reducing investment in service reliability and fraud prevention.
  • Arguments against the tax highlight its potential to discourage digital adoption and impact financial inclusion goals.

Part of a longer story

This is day 7 of 9 in Taxation and Other Laws (Amendment) Bill, 2026, which has been running since 5 August 2026. Reading it whole is usually worth more than reading today alone — the exam asks how something developed.

Questions

  1. Discuss the implications of introducing a Merchant Discount Rate (MDR) on digital payment systems for financial inclusion and the formalisation of the economy. 150 words
    Attempt this — 150 words in 8 min
    0 / 150 words 8:00
  2. The transition towards a less-cash economy has been a significant policy objective in India. Analyze the challenges associated with taxing digital payment rails and the potential impact of such fiscal measures on the long-term sustainability of digital infrastructure. 250 words
    Attempt this — 250 words in 11 min
    0 / 250 words 11:00

Prelims

  1. Which Act is proposed to be amended by the Taxation and Other Laws (Amendment) Bill, 2026, to allow for the notification of charges on electronic payment modes?

Syllabus

Topics

Sources

250words.in · https://250words.in/daily/2026-08-12/rajya-sabha-legislative-business-and-upi-charges