Which Act is proposed to be amended in relation to digital payment charges under the Taxation and Other Laws (Amendment) Bill, 2026?

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The correct answer is Option A: Payment and Settlement Systems Act, 2007. The Taxation and Other Laws (Amendment) Bill, 2026, passed by the Lok Sabha, creates a framework for allowing charges on specified digital payment transactions under the Payment and Settlement Systems Act, 2007. The Bill does not immediately impose charges on all UPI transactions; charges can be introduced only through future government notifications and prescribed rules. The Central Government will have the authority to specify which payment systems and transactions remain free and which transactions may attract charges. The Reserve Bank of India (RBI) will continue to regulate payment systems and oversee the implementation of rules under the Payment and Settlement Systems Act, 2007. Merchant transactions by large retailers and online platforms may be considered for charges, while person-to-person UPI transfers such as family transactions may continue to remain free. UPI recorded 23.66 billion transactions worth ₹29.88 lakh crore in July 2026, with year-on-year growth of 22% in transaction volume and 19% in transaction value. The proposed charging mechanism aims to help banks, payment service providers, and fintech companies recover expenses related to digital-payment infrastructure, security, and transaction processing. UPI is operated by the National Payments Corporation of India (NPCI), while payment systems are regulated by the Reserve Bank of India under the Payment and Settlement Systems Act, 2007.

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Banking Regulation Act, 1949

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Reserve Bank of India Act, 1934

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Digital Payments Act, 2020

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Information Technology Act, 2000

Which Act is proposed to be amended in relation to digital payment charges under the Taxation and Other Laws (Amendment) Bill, 2026?

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Which Act is proposed to be amended in relation to digital payment charges under the Taxation and Other Laws (Amendment) Bill, 2026?

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