KTR asks Nirmala Sitharaman not to impose tax on UPI transactions

BRS working president K T Rama Rao urged Union Finance Minister Nirmala Sitharaman not to impose any tax on UPI transactions, cautioning that higher digital payment costs could affect young entrepreneurs, small businesses and financial inclusion

Hyderabad: BRS working president K T Rama Rao urged Union Finance Minister Nirmala Sitharaman not to impose any tax on UPI transactions, cautioning that it could affect young entrepreneurs and small businesses relying on digital payments.

In a post on X, Rama Rao said UPI had become the backbone of youth entrepreneurship, enabling Gen Z and Gen Alpha to pursue side hustles, freelance work and small businesses with ease. He cautioned that taxing digital transactions could discourage financial inclusion and push micro-entrepreneurs back towards cash-based transactions.

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“Empower Digital India. Empower young entrepreneurs. Don’t tax their future,” he said.

The Central government has mandated that UPI and RuPay transactions up to Rs 2,000 remain free for consumers and merchants, while introducing a regulated Merchant Discount Rate (MDR) of 0.4 per cent on high-value person-to-merchant (P2M) transactions above Rs 2,000.