Lok Sabha Passes Bill to Allow Charges on Digital Payments The Lok Sabha on Thursday, August 6, 2026, passed the Taxation and Other Laws (Amendment) Bill, which amends the Payment and Settlement Systems Act, 2007 to authorize the government to permit banks and payment service providers to levy charges on transactions through the unified payments interface (UPI) and other notified electronic payment modes. The bill was passed without a formal debate due to persistent interruptions by the Opposition, which raised issues such as alleged theft of donations at the Ram temple in Ayodhya. The amendment removes the existing legal provision that previously prohibited banks and payment service providers from charging Merchant Discount Rate (MDR) on electronic payment modes. Real-time payments via RTGS and NEFT have long been subject to service charges, but UPI transactions remained exempt until now. The proposed changes are part of a broader taxation legislation introduced in the Lok Sabha on August 4, 2026. The bill was passed through a voice vote after the Lok Sabha resumed at 2 p.m. following an earlier adjournment. Finance Minister Nirmala Sitharaman moved the bill to amend the Payment and Settlement Systems Act, 2007, the Income Tax Act, 2025, and the Finance Act, 2026. The government’s objective is to impose small charges on digital payment services for consumers and small businesses while ensuring a sustainable revenue model for banks, payment service providers, and infrastructure firms. The amendment modifies Section 10A of the Payment and Settlement Systems Act, 2007, replacing the phrase “electronic modes of payment prescribed under section 269SU of the Income-tax Act, 1961” with “one or more electronic modes of payment as the central government may, by notification, specify.#finance_minister #lok_sabha #nirmala_sitharaman #ru_pay #bhim_upi
