Ministry of Finance has released the new Gazette Notification of new rules on merchant payments below ₹2000.
UPI payments up to ₹2,000 and all RuPay debit card payments are now legally free for users. Banks and payment system providers cannot charge anyone for making or receiving these payments, as per a Finance Ministry notification dated 14 September 2026.
Department of Financial Services issued this order (S.O. 5067(E)) under Section 10A of the Payment and Settlement Systems Act, 2007. It bans direct as well as indirect charges, so a bank cannot add the fee under some other name either.
No charges on UPI up to ₹2,000 and RuPay debit cards
Which payments are free under Section 10A
Notification names only two payment modes. Both the person paying and the person receiving the money are protected:
- RuPay debit card payments are free, with no upper limit on the amount.
- UPI transactions up to ₹2,000 are free for the sender and the receiver.
₹2,000 limit applies to UPI only. No amount cap on RuPay debit card payments.
What about UPI payments above ₹2,000
UPI payments above ₹2,000 fall outside this legal protection. That does not mean you will pay a fee. On 8 August 2026, Finance Ministry said all person-to-person (P2P) UPI transfers will stay free for users, and most merchant payments will also stay free. If a Merchant Discount Rate (MDR) comes in, it will apply only to some merchant payments above a set limit, at a rate much lower than debit and credit card MDR.
MDR is charged to the shopkeeper, not the customer. No MDR rate has been fixed yet. NPCI's UPI and Services Steering Committee will decide whether it is needed.
Why this notification came now
Earlier, Section 10A was tied to payment modes listed under Section 269SU of the Income-tax Act. This kept UPI and RuPay debit cards fully charge-free since 2020. In August 2026, Parliament passed Taxation and Other Laws (Amendment) Bill, 2026, which removed that link and let the Central Government notify which payment modes stay free. 14 September notification is the list issued under this new power.
| Detail | Information |
|---|---|
| Rule | No charges on UPI up to ₹2,000 and RuPay debit cards |
| Issued By | Department of Financial Services, Ministry of Finance |
| Notification No. | S.O. 5067(E), dated 14 September 2026 |
| Law | Section 10A, Payment and Settlement Systems Act, 2007 |
| Covered Payments | RuPay debit cards (no limit), UPI up to ₹2,000 |
| Cannot Charge | Banks and payment system providers |
| Official Website | egazette.gov.in |
FAQ's
Will I pay a fee for sending ₹5,000 to a friend on UPI?
No. Finance Ministry has said all P2P UPI transfers stay free for users.
What if my bank charges me for a UPI payment under ₹2,000?
Complain to your bank first. If it is not solved in 30 days, file a complaint with RBI Ombudsman at cms.rbi.org.in.