India is set to give the central government broader authority over which digital payment methods are exempt from charges, coinciding with the international rollout of UPI in multiple countries and deeper regulatory oversight of electronic currencies.
India is moving to give the central government wider control over which digital payment methods are shielded from charges, according to the proposed Taxation and Other Laws (Amendment) Bill, 2026. The change would shift the protection framework away from its current link to payment methods named under the Income Tax Act and towards separate government notifications, a move that would keep banks and payment providers barred from levying fees directly or indirectly on covered transactions. Recent amendments to India’s tax rules have already shown how quickly the country is widening its regulatory lens to include electronic money, central bank digital currencies and crypto-related reporting.
The draft bill does not itself create a new charge or set a merchant discount rate, the fee merchants pay to card or payment networks. Instead, it changes the mechanism by which protected payment methods are designated. That matters because the existing framework has underpinned zero-charge treatment for transactions made through BHIM-UPI and RuPay debit cards, and a separate rule framework already recognises UPI, IMPS, NEFT, RTGS and other electronic modes in India’s payment system.
The timing is notable because the National Payments Corporation of India is also pushing UPI beyond domestic borders. Bloomberg reported that NPCI chief executive Dilip Asbe said the network is in talks with Japan, Malaysia and Bahrain and could reach 15 to 20 markets over the next decade, with an early focus on countries that have large Indian communities. The long-term aim is to make UPI more useful for remittances and other cross-border transfers, while reducing reliance on foreign payment rails.
UPI is already active in nine countries, including Singapore, France and the United Arab Emirates, Bloomberg reported. It supports person-to-person remittances with Singapore and Nepal and inward remittances from Greece. In February, NPCI International signed an agreement with Malaysia’s Payments Network to expand QR-based merchant payments between India and Malaysia, starting with Indian travellers using their UPI apps at DuitNow QR acceptance points. That agreement suggests the overseas push is already moving from strategy to execution.
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