Income Tax 7 August 2026
MDR on UPI Payments
The Lok Sabha has passed a bill that enables the government to allow merchant discount rates on UPI and digital payments, which aims to create a sustainable revenue model for payment service providers, the amendment also seeks to modify the payment prescribed under Section 269SU of the Income Tax Act, 1961, this move is expected to have significant implications for the digital payments industry in India, with the government seeking to create a more level playing field for all payment service providers
The amendment to the Income Tax Act, 1961, aims to *create a sustainable revenue model* for payment service providers. Key aspects of the bill include:
- enabling the government to allow merchant discount rates on UPI and digital payments
- modifying the payment prescribed under Section 269SU of the Income Tax Act, 1961
- creating a more level playing field for all payment service providers
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