What Are the New UPI Rules in 2026?

Recently, PM Shri Narendra Modi announced that UPI will be launched in Malaysia to deepen cooperation between the two countries in the digital payment space. Apart from that, UPI is already operational in France, Bhutan, Nepal, the UAE, Mauritius, and Singapore. UPI is in the limelight around the world; we need to stay informed about its latest updates. 

In this blog, we will discuss UPI's new rules, daily limits, monthly limits and the applicable GST threshold for a business owner. 

Key Takeaways

• Standard UPI daily limit is ₹1 lakh

• Special categories allow up to ₹5 lakh per transaction

• Cumulative daily limit can go up to ₹10 lakh for select payments

• Regular UPI payments have no charges for users

• Businesses crossing GST thresholds via UPI must register for GST

• New UPI settlement cycles start from 3 November 2026

• PF withdrawal via UPI expected from March 2026

UPI Daily Transaction Limit In 2026 

As people increasingly adopt UPI, it is important to know the daily transaction limits. Currently, the daily limit on UPI transactions stands at ₹1 lakh. This limit may be enough for a common man to meet their daily transaction requirements. 

However, there are some exceptions to this rule. There are some exceptions to this rule. A Circular was issued by NPCI in September 2025, which changed the daily limits for certain types of transactions, such as 

• Capital markets
• insurance
• travel
• education fees 
• government payments 

For the above categories of transactions, the limit of ₹5 lakhs per transaction and a cumulative limit of ₹10 lakhs per day is applicable. 

UPI Weekly Transaction Limits 

While there is less attention paid to the weekly UPI transaction limits, there are limits to the number of transactions you can complete in a week. Based on your user profile, the type of platform you use, and the frequency of the transactions. There is no clarity on the exact transaction limit; it is believed that this limit varies person to person and bank to bank. 

For the majority of people using UPI for personal transactions, these limits may not be an issue. For individuals using UPI for business purposes or for high-volume transactions, monitoring both the daily and weekly limits is important to avoid potential delays in the payment. 

UPI Monthly Transaction Limits 

For those making larger ticket size or high volume transactions, the monthly UPI limits are important to consider. Most UPI providers set a maximum number of transactions that can be completed during a specific timeframe. Although the monthly limits are typically not addressed as often as other limits, they are equally important in the context of business finance. 

UPI Transaction Fees 

Although there are no additional fees associated with UPI transactions for transferring funds to friends, family or for shopping. However, there is an exception. 

If you use a wallet or Prepaid Payment Instrument (PPI) to scan a merchant's QR code. In this case, an interchange fee of 0.5% to 1.1% is charged to the merchant's bank, not to you. 

The exact interchange fees are based on the service utilised; more details follow: 

UPI GST Threshold Exposure

Additionally, the Government has brought in a new GST threshold for businesses using UPI to collect payments. 

If you are a business using UPI and your UPI payments breach the GST threshold, you will have to comply with GST.

How will this affect businesses?

Businesses must register for GST when they reach the GST threshold, which is as follows: 

• Goods/product-based businesses: 40 Lakh per year in aggregate turnover.
• Service-based businesses: 20 Lakh per year in aggregate turnover. 
• GST Compliance: Businesses that have exceeded the GST threshold must register under GST and start filing the returns. 

New UPI Rules From 3 November 2026

As per proposed implementation, starting November 3rd, 2026, the National Payments Corporation of India (NPCI) will implement new settlement rules for UPI transactions. 

Before this, UPI settlement cycles had included all successful transactions and disputes together as one batch. Starting from November 3rd, 2026, NPCI will separate authorised (successful) transactions from dispute settlements, thus creating:

• A total of ten settlement cycles per day for authorised (successful) transactions only.
• Two additional settlement cycles will be used solely for processing dispute-related settlements, providing a separate time frame for resolving these issues.

The objective is to provide faster settlement of everyday payments, thereby reducing delays and avoiding disputes. 

Below are the details regarding new settlement cycles.

Withdrawal of PF Using UPI

As per announcement, the Government intends to allow Provident Funds (PF) to be withdrawn directly via UPI from March 2026. The step should reduce the complexity of withdrawing an employee's PF funds and provide an alternative to traditional banking channels. 

This is just one example of the government's desire to further the digitisation of government services and improve accessibility to all people. Additionally, it will greatly increase the speed of processing PF claims, without the burden of paperwork or lengthy waiting periods.

Closing Notes 

Regardless of whether you are a consumer or a business owner, UPI has become a major part of our digital payment system. In order to continue to utilise UPI efficiently and in compliance with the UPI transaction limits, you need to remain aware of the changes. 

So, the next time you make a payment or a large transaction, simply recall these guidelines and avoid any surprise charges or account suspension. Businesses should update their payment systems and ensure they are adhering to all applicable UPI guidelines corresponding to GST compliance. 

Frequently Asked Questions on UPI

What is a UPI ID?

Your UPI ID is the digital equivalent of your payment address; it is your name @ bank; it allows other people to send you money without having to ask for your bank account. 

What is VPA in UPI?

VPA stands for "Virtual Payment Address" It is another term for a UPI ID; when someone asks for your VPA, they are essentially asking for your UPI ID.

What is the VPA remark in UPI?

VPA remark is a short description that you can add while making a payment using UPI; it will help you remember the reason you made the payment, e.g. rent, grocery, salary, etc.

How to increase the UPI limit?

You can increase your UPI limit by doing a complete KYC (Know Your Customer) with your bank; some banks also let you increase your limit if you maintain a higher balance in your account.

What is UPI Lite?

UPI Lite is a new feature intended for smaller transactions (e.g. buying snacks, tea, taxi fare, etc.); it will let you make small transactions without needing to enter a UPI pin each time. 

How much money can be transferred through UPI?

Usually, you can transfer up to ₹1 Lakh per day through UPI. 

What is the UPI reference number​? 

A UPI reference number is a unique number generated for each transaction; it serves as a receipt for your payment.

How much can be transferred through UPI? ​

The largest amount allowed per transaction is generally ₹1 Lakh. 

How many transactions per day are in UPI? 

Generally, most banks permit approximately 20 transactions per day through UPI; however, this number may differ slightly depending upon the bank you are using and/or the UPI app used.

How is the digital rupee different from UPI? 

UPI is a mechanism for transferring money from one bank account to another; digital rupee, on the other hand, is the actual digital version of cash issued by the RBI; you would use UPI to move money (the funds), while digital rupee is the funds themselves.

About the author

Mehul Jagwani

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Mehul is a seasoned content writer with a passion for simplifying complex accounting and GST topics. With a keen interest in entrepreneurship and business management, he specializes in creating informative and engaging content for themunim.com. His goal is to help businesses understand and implement accounting and GST software solutions effectively. When he's not crafting content, Mehul enjoys exploring new places and spending time with his Golden Retriever.