UPI Transaction Limit in Bank Account as Per Income Tax (2024)
Income Tax Regulations for UPI Transactions
Under the Income Tax Act, UPI transactions are classified as income from other sources and fall under section 56(2). Taxpayers must report all UPI and digital wallet transactions when filing their ITR. The income tax department diligently monitors UPI transactions.
Individuals should acknowledge the tax implications related to UPI and e-wallet transactions to ensure compliance and avoid potential complications. Any amount exceeding Rs.50,000 received through UPI or digital wallets is considered taxable Income subject to specific conditions.
UPI Transactions and Taxation Criteria
The taxability of UPI transactions is contingent on several conditions:
- UPI transactions up to Rs.50,000 remain exempt from tax offering relief to individuals within this threshold.
- Gift vouchers received through UPI or e-wallets above Rs.5,000 from an employer are subject to UPI tax, necessitating thorough Income reporting.
- Transactions exceeding Rs.1,00,000 via UPI undergo taxation, aligning with the National Payments Corporation of India’s provisions.
Tax Treatment for UPI and E-Wallet Transfers from Friends
It is crucial to discern their tax implications in scenarios involving repayments or monetary transfers between friends. Repayment amounts below Rs.50,000 generally fall within the Tax exemption limit, underscoring the importance of adhering to this threshold for tax-free transactions. Documenting such repayments and debt settlements as a precautionary measure, reinforced by a written acknowledgment from the transacting party, can serve as valuable evidence if scrutiny arises.
UPI Limit as Per GST
Same as Income Tax, There is no limit for UPI specified under the GST Act. But there is a limit to obtaining GST Registration, which is specified in the GST Act as Below:
If any Person Supply Goods Only then the aggregate turnover limit is Rs.40 Lakhs
if any person supplies service only then the aggregate turnover limit is Rs.20 Lakhs
