India, Aug. 5 -- The Centre has introduced the Taxation and Other Laws (Amendment) Bill, 2026, which could allow the government to bring back Merchant Discount Rate (MDR) on certain UPI transactions in the future. While UPI payments remain free for now, the proposed law gives the government the power to introduce merchant charges if needed.

What Is The New UPI Policy Proposal?

Finance Minister Nirmala Sitharaman has introduced the Taxation and Other Laws (Amendment) Bill, 2026 in the Lok Sabha. The Bill proposes amendments to the Payment and Settlement Systems Act, 2007, along with changes to the Income Tax Act and Finance Act. One of the key proposals is to remove the legal restriction that currently prevents banks and payment service ...