The finance ministry of India has clarified that they will not charge any taxes through the Unified Payment Interface(UPI). However, RBI is trying to put the charges on digital payment methods.
It can make things more complicated if you do not make your choices in the right direction. Plan out the best strategy to make things work correctly for you. The main concern of the authority is the cost recovery in the transaction process.
RBI is stressing charges from UPI payments. But it is not possible practically. So you have to implement the correct strategy to make things work for you in the right direction.
Why Are Charges Not Levyed On UPI Transactions?
Several reasons are there why you need to know why the finance ministry is not levying the charges on the UPI transaction. Let’s get through the details to have a better insight into it.
- It is a digital public good for the public convenience. Therefore, it must be kept from any kind of taxation in the payment process.
- RBI has to meet its recovery options of money from the economy through other means, not charging taxes on UPI transactions.
- The government provides financial support for making such transactions. Phonepay, GPay and other modes of digital transactions are modernising the Indian economy with safety.
- The government is encouraging digital transactions to make things work for you in the right direction.
- RBI is stressing the fact of charging taxes on the transactions through UPI transactions. But the problem is the rural areas of the country are also using the digital payment method.
- Once the tax is charged on it, then the backward classes of the country will suffer a lot.
Hence, you must consider these facts while questioning the government’s judgement not to levy taxes on UPI payments. In addition, you must know the limitations of the traditional transaction system, which makes the transactions process.