Guwahati: The Lok Sabha on Thursday passed the Taxation and Other Laws (Amendment) Bill, 2026, which includes amendments to the Payment and Settlement Systems Act, 2007, authorising the government to permit banks and other payment service providers to levy charges on UPI and other notified electronic payment modes.
The Bill was passed through a voice vote without discussion as repeated Opposition protests disrupted proceedings over several issues, including allegations relating to the theft of donations at the Ram temple in Ayodhya.
One of the key amendments removes the existing legal provision that bars banks and payment service providers from collecting the Merchant Discount Rate (MDR) on notified electronic payment modes.
At present, RTGS and NEFT transactions attract service charges, while UPI payments remain exempt from such fees. The amendments to the Payment and Settlement Systems Act form part of the broader taxation legislation introduced in the Lok Sabha on August 4.
Finance Minister Nirmala Sitharaman moved the Bill for consideration after the House resumed proceedings following an earlier adjournment.
Besides amending the Payment and Settlement Systems Act, 2007, the legislation also proposes changes to the Income Tax Act, 2025, and the Finance Act, 2026.
According to the government, the amendment is intended to support a sustainable revenue model for banks, payment service providers and payment infrastructure companies while allowing nominal charges on digital payment services used by consumers and small businesses.