India Ranks 1st in the world for doing UPI transactions. But most peoples are unaware about Income Tax On UPI Transactions – Limit, Rules, Notice
We will discuss about important things about UPI and E Wallets, Charges, Rules, Guidelines, Limits etc. You may receive income tax notice, if you do any wrong thing with UPI.
Own Account
If you are sending the money to your own account, which is linked to the same PAN number, then this is okay.
UPI With Savings Account
If you are a shopkeeper and business owner and your UPI number is linked to a Savings account, then there is a limit for you. You may face problems if you receive 10,000+ money daily in your savings account.
If you don’t want to face this problem, you should open a current account and linked the UPI with that account.
UPI Transactions More Than Income
If your UPI transactions exceed your annual income, the Income Tax Department may ask you questions. Some people only send and receive money in their accounts, and sometimes transactions cross a large amount without income or profit.
If your income is above 5 Lakh, you have to pay Tax, but if your income is above 2.5 lakh a year, so you have to file the Income tax return. Filing ITR and paying tax are both different. You have to clarify your transactions in ITR to avoid any problem.
UPI Above 50,000
If any UPI transaction is crossing 50,000 limit, this may also attract ITD department. If you receive the amount above 50,000, It may be treated as a gift or as taxable income. But if the amount is repayment of something, then it’s ok. You have to pay tax on that amount, not the transaction.
Gift Vouchers & Cashback On UPI
Gift vouchers and cashback above 50,000 in a year are also taxable. If you receive the voucher in a year from anyone, this is taxable.
UPI Limits
UPI transactions crossing 1,00,000 are also taxable; 1 lakh is the limit for UPI. You can do 20 transactions in a day with this limit.
Charges On Merchant
If the UPI transaction crosses 2,000 through PPI mode, 1.1% interchange fees will be applied to the merchant, not the customer. This is applicable when UPI is linked to a wallet, not a bank
GST
If your turnover crosses 40 Lakh, then you need a GST number, and if you are in a professional business and your turnover crosses 20 lakh, then you also need a GST number.
At last, if you are not falling within Income tax limit, then, you don’t have to pay any tax, but you need proper proof and clarification of transactions in any problem.
So, these are rules for Income Tax On UPI Transactions. You should also the new changes in UPI.