Tally Automation
Mar 26, 2024

Understanding UPI Transaction Limits in India: A Comprehensive Manual

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Raja Ray

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As a part of the accounting industry, we understand the importance of smooth financial operations.

UPI, a popular digital payment system in India, can be a valuable tool, but its transaction limits can impact business processes.

This guide explores its limits, empowering you to sail UPI payments with balance! Let's learn how to leverage UPI for efficient financial management!

The General UPI Transaction Limit

The NPCI establishes a general framework for UPI transactions, setting the standard limit at ₹1 Lakh.

This signifies that in a single UPI transaction, the maximum amount you can transfer is ₹1 Lakh. It's important to remember that this is not a rigid limit. There can be variations based on two key factors:

1. Your Bank's Policy: Individual banks have the autonomy to set their own limits within the NPCI framework for enhanced security. These limits might range from as low as ₹10,000 per transaction to the standard ₹1 Lakh offered by the NPCI. It's advisable to check with your bank for their specific UPI transaction limits.

2 . The Type of UPI Account: There are two main types of UPI accounts: full-KYC (Know Your Customer) and non-KYC. Full-KYC accounts generally have higher transaction limits compared to non-KYC accounts. This is because full-KYC accounts involve a more rigorous verification process, offering a higher level of security. Be sure to confirm the specific limits applicable to your account type.

Exceptions for Specific Transactions

Recognizing the potential of UPI for larger transactions, the NPCI has introduced higher limits for specific categories. Here's a breakdown:

  • Verified Merchants and Specialized Transactions: For verified merchants and transactions categorized as capital markets or insurance, the limit has been generously raised to ₹2 Lakh per transaction. This facilitates smoother and more secure transactions for larger investments or insurance payments.

  • Healthcare and Education Boost: To incentivize the use of UPI in crucial sectors like healthcare and education, the Reserve Bank of India (RBI) has taken a significant step. They have increased the transaction limit to a substantial ₹5 Lakh for payments made to hospitals and educational institutions. This initiative aims to simplify payments for critical medical needs and educational expenses.

Also Read: e-Invoicing Under GST: Applicability & Limits

Daily Transaction Limits: Keeping a Check

Beyond the per-transaction limit, there's also a daily cap on the number of UPI transactions you can perform.

In most cases, you'll be able to conduct up to 20 UPI transactions per day. However, similar to per-transaction limits, this number can vary depending on your bank's policy.

It's recommended to consult your bank for their specific daily transaction limits.

Understanding the Rationale Behind Limits

UPI transaction limits are meticulously designed to maintain a balance between convenience and security. These limits offer several advantages:

  • Enhanced Security: By setting limitations on transaction sizes and frequency, the system mitigates the risk of fraudulent activities in case of unauthorized access to your UPI account.

  • Gradual Adoption: For new users unfamiliar with digital payments, lower transaction limits can serve as a stepping stone, allowing them to build confidence and experience the benefits of UPI gradually.

  • Fraud Prevention: Limits also help to deter individuals from attempting to launder large sums of money through UPI.

The Rising Landscape of UPI Limits

As the UPI ecosystem matures and user comfort levels increase, we can expect adjustments to transaction limits.

The NPCI and banks will continuously evaluate the need to adapt these limits to cater to the changing financial landscape and user demands.

Proactive Measures for a Smooth UPI Experience

Here are some essential tips to ensure a seamless UPI experience while adhering to transaction limits:

  • Stay Informed: Regularly check with your bank for their most current UPI transaction limits, both per transaction and daily. This knowledge empowers you to plan your finances effectively and avoid any inconveniences during transactions.

  • Utilize Multiple UPI Accounts (if applicable): If your bank allows linking multiple accounts to your UPI ID, consider doing so. This can provide you with additional flexibility to manage transactions exceeding the limit on your primary account.

  • Plan for Large Transactions: If you anticipate a transaction exceeding the standard limit, plan in advance. You can either break down the payment into smaller, permissible transactions or utilize alternative payment methods for larger sums.

By understanding UPI transaction limits and adopting these proactive measures, you can maximize the benefits of this revolutionary digital payment system and manage your finances with greater control and convenience.

Also Read: Understanding the Difference Between TDS and TCS

Remember: UPI offers a secure and swift payment experience. Staying informed about transaction limits empowers you to plan your finances effectively and avoid any roadblocks during your digital transactions. What is UPI?

FAQS

1. What is UPI?

UPI (Unified Payments Interface) is a system that allows you to transfer money between two bank accounts. You can use a mobile app to send or receive money.

2. How does UPI work?

UPI uses a virtual payment address (VPA) to identify your account instead of a bank account number. You also need a UPI PIN to use UPI. When you want to send money to someone, you just need to enter their VPA and the amount you want to send. The money will be transferred from your bank account to the recipient's bank account immediately.

3. What are the benefits of using UPI?

UPI is a fast, secure, and convenient way to transfer money. It is also very easy to use.

4. Is UPI secure?

UPI is secure because you need to enter your UPI PIN to complete a transaction. This PIN is like your ATM PIN and should be kept confidential.

5. How do I create a UPI PIN?

You can create a UPI PIN by logging in to your UPI app and following the instructions.

6. What can I do with UPI?

You can use UPI to transfer money, pay bills, and shop online.

7. What are the charges for using UPI?

There are no charges for using UPI for person-to-person transfers. However, there may be charges for bill payments and other transactions.

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