The Unified Payments Interface (UPI) has revolutionised digital payments in India. Its convenience and ease of use have made it the go-to option for millions. With so many people using UPI, it’s important to know the rules about how much you can send and receive. This blog post will explore the current UPI transaction limits in 2024. It will also discuss potential changes and what happens if you go over them. This will help you use UPI responsibly and prevent tax issues.
Understanding UPI Transaction Limits In 2024
In 2024, NPCI, which oversees UPI, establishes UPI Transaction Limits In 2024. It’s crucial to understand these limits to ensure your transactions stay compliant. Here’s a breakdown of the key limits:
Daily Transaction Limit: In March 2024, the NPCI set a daily limit of ₹1 lakh for UPI transactions. This applies to all UPI apps. You can transfer up to ₹1 lakh a day through any UPI app like PhonePe or Google Pay.
Per Day Transaction: Bank-specific limits differ among banks. They set lower daily transaction limits for their account holders using UPI. These limits can vary from ₹25,000 to ₹1 lakh. Always check with your bank to confirm your specific UPI transfer limit.
Exceptions for Specific Payments: There are exceptions for certain payments beyond the usual daily limit. For example, if you pay for schools or health services, you can transfer up to ₹5 lakh per day.
Transaction Volume Limit: There is no set limit on how many UPI transactions you can do in a day. The NPCI suggested a rule to prevent one UPI app from being too dominant. The rule will possibly start by December 31, 2024. It suggests capping 30% of UPI transactions for one app like PhonePe or Google Pay. This aims to encourage a more balanced ecosystem within the UPI market.
Expected Changes in UPI transaction limits in 2024:
While no big alterations to UPI transaction limits are confirmed for 2024. It’s smart to stay informed. You can keep an eye on official NPCI announcements or consult your bank for any revisions.
What Happens if UPI Transfer Limit Exceed?
No Direct Link: Exceeding the UPI transaction limits per day of ₹1 lakh set by NPCI won’t make the tax department send you a notice right away. The tax department mainly looks at big cash deposits and unexplained high-value deals.
Scrutiny for High-Value Transactions: Exceeding a bank’s UPI limit in 2024 may raise red flags. Source clarity is crucial. This could result in scrutiny. A notice may be sent to ask about where the money came from and why these transactions took place.
Inconsistencies with tax filings: It can prompt questions about unreported income sources. Be prepared to explain any discrepancies found.
Consequences of Exceeding UPI transaction Limit
Exceeding UPI transaction limits in 2024 can trigger various consequences:
- Income Tax Scrutiny: The tax department watches big transactions. Going over the daily limit of ₹1,00,000 could attract attention. You could receive notices seeking clarification on the source of funds.
- Tax assessments: It may happen if the ITD thinks that the money you didn’t report is taxable income. This could lead to penalties and interest.
- Account Suspension: Banks can stop your UPI account if they see anything weird or if you break their rules too many times. This could be a big problem if you use UPI a lot for your everyday transactions.
- Transaction Failure: If you try to make a purchase higher than the allowed amount, it may fail.
Tips for UPI Limit To Avoid Income Tax Notice:
Here are a few tips to stay below the UPI transaction limit in 2024 and prevent receiving an income tax notice.
- For high-value transactions exceeding daily limits, explore options like Real-Time Gross Settlement (RTGS) or National Electronic Funds Transfer (NEFT) to facilitate larger money movements.
- Be sure to keep accurate receipts and bills for all your UPI payments, particularly expensive ones.
- To maximise flexibility with UPI payments, explore utilising multiple apps instead of relying on a single one.
- If any part of UPI transactions is unclear or you have questions about limits, do not hesitate to contact your bank or NPCI for explanations.
- If moving a lot of money. Divide it into smaller amounts to stay within the daily limit.
Conclusion:
UPI offers a fantastic way to manage finances digitally. However, staying informed about the transaction limits and adhering to them is crucial. Ensure smooth UPI transaction limits in 2024 by following these tips. Stay compliant and avoid income tax issues. Remember to stay informed to make your UPI experience smooth and hassle-free.
