Gazette locks zero charges on UPI and RuPay up to ₹2,000
Finance Ministry notification S.O. 5067(E) of 14 September names RuPay debit cards and UPI transfers up to ₹2,000 as the electronic modes that banks and system providers may not price, directly or indirectly, on either side of the payment.
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The Finance Ministry on 14 September notified that banks and payment-system providers may not levy a charge, directly or indirectly, on a person who sends or receives a RuPay debit-card payment or a UPI transaction of up to ₹2,000.
The instrument is S.O. 5067(E), issued by the Department of Financial Services under Section 10A of the Payment and Settlement Systems Act, 2007. It names two electronic modes: debit cards powered by RuPay, and Unified Payments Interface transactions up to ₹2,000. The prohibition covers both sides of the payment.
The gazette arrives after Parliament, on 6 August, passed the Taxation and Other Laws (Amendment) Bill, 2026. That bill changed Section 10A so that the blanket zero-charge rule tied to Section 269SU of the Income-tax Act no longer automatically covered every UPI and RuPay payment at large merchants. Section 269SU applies to businesses with turnover above ₹50 crore. The amendment opened a legal path for a merchant discount rate on high-value UPI at those firms.
The government had said, while the bill was moving, that person-to-person transfers and small-value payments would stay free. Monday's notification is that promise in the Gazette of India. It does not say that every UPI payment above ₹2,000 is now chargeable. It says the modes listed in the order are protected. Anything outside that list sits in the space the August amendment created.
What ₹2,000 captures
Most everyday UPI scans at kiranas, street stalls and small restaurants sit under that cap. So do a large share of person-to-person transfers. The National Payments Corporation of India has built UPI's volume on exactly those tickets. A charge on them would have shown up as a political problem faster than a charge on a ₹20,000 checkout at a marketplace.
RuPay debit cards are in the same sentence. That keeps the domestic card scheme on the same zero-charge footing as the QR scan for the tickets that matter to small merchants. International scheme cards are not named.
Banks and fintechs that have argued for an MDR on large merchants still have the August amendment. What they do not have, after Monday, is room to test a fee on the ₹2,000-and-under band or on RuPay debit at any ticket the notification covers. "Indirectly" in the text is the word that matters for packaging a fee as a convenience charge, a withdrawal fee or a merchant "platform" cost.
The funding argument is not closed
Zero MDR on a system that now clears billions of monthly transactions leaves a bill. Banks have said they want that bill shared. The ministry has said rumours of an outside push to price UPI were "unfounded, completely false, and misleading." The gazette does not create a replacement subsidy. It only names the free band.
For users the instruction is short. A UPI send or receive of ₹2,000 or less should not carry a bank or PSP fee. A RuPay debit-card payment should not carry one either. If a fee appears on those tickets after 14 September, the gazette is the document to put in the complaint.
