As the tax filing season gains momentum, taxpayers can now avoid the hassle of traditional net banking while making large payments. Although the standard UPI transaction limit remains capped at Rs 1 lakh for most transfers, the National Payments Corporation of India (NPCI) has introduced a major relaxation for government-related payments.
Under the revised 2026 guidelines, taxpayers can pay up to Rs 5 lakh per day through UPI for income tax and other government dues. The move is aimed at simplifying high-value payments and making tax compliance faster and more convenient.
Earlier, the Rs 1 lakh cap often created difficulties for taxpayers with larger liabilities, forcing many to rely on net banking portals or bank visits. With the updated framework, verified government merchants, including the Income Tax Department, are now eligible for UPI transactions of up to Rs 5 lakh per transaction.
This enables users to make high-value tax payments instantly through popular UPI apps such as Google Pay, PhonePe and BHIM.
However, despite NPCI permitting the higher limit, successful transactions may still depend on individual bank policies, as some banks continue to maintain internal caps for security and fraud prevention.
Taxpayers are advised to verify whether their bank supports the enhanced Rs 5 lakh limit for government and tax payments before initiating transactions. Experts also recommend using the official Income Tax Department e-filing portal and selecting the “Payment Gateway” option for smoother processing.
In addition, users who have recently changed their UPI PIN or linked a new bank account are advised to wait at least 24 hours before attempting high-value transactions to avoid payment failures.
Apart from tax payments, NPCI has also extended the Rs 5 lakh UPI transaction limit to other important sectors, including healthcare payments at verified hospitals, educational fees for schools and universities, and investments in IPOs and RBI Retail Direct schemes.
The move is expected to further strengthen India’s digital payments ecosystem and reduce dependence on physical paperwork and slower banking processes.
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