The Lok Sabha passed the Taxation and Other Laws (Amendment) Bill, 2026, which authorizes the government to permit banks and service providers to levy charges on UPI and other electronic payments.
The legislation amends the Payment and Settlement Systems Act, 2007, removing existing legal provisions that prevented the application of Merchant Discount Rates on notified digital payment modes.
Finance Minister Nirmala Sitharaman moved the bill, which aims to create a sustainable revenue model for banks and payment infrastructure firms while maintaining small charges for consumers and small businesses.