You might’ve seen a lot of buzz recently — social media posts, forwarded messages, even a few news headlines — claiming that from now on, UPI transactions over ₹2,000 will have 18% GST on them. Naturally, people started panicking a bit. Like, does that mean we’ll have to pay tax every time we send money to someone through PhonePe or Google Pay? That would be a huge deal, right?
The Rumour About 18% GST on UPI — Is It True?
Here’s the thing: people started sharing this idea that any UPI payment above ₹2,000 would now attract an 18% Goods and Services Tax (GST). Sounds scary, especially for those who use UPI daily — whether for paying at the local kirana store, sending rent, or splitting bills.
But experts are saying — that’s not true. At least not in the way it’s being shared online. There’s no new rule that directly adds GST to UPI payments. You’re not going to suddenly lose ₹360 on a ₹2,000 transfer just because of tax. It’s just a big misunderstanding.
Here’s What Experts Are Actually Saying
Anand K Rathi, who co-founded MIRA Money, broke it down in a very simple way. According to him, UPI is basically just a system that moves money from one bank account to another — and doing that has always been free. There’s no GST on those transactions.
But here’s the catch: if UPI platforms like Paytm or PhonePe ever do start adding a service charge (say ₹1 or ₹2 per transaction), then that small service charge would have GST on it. So yes, 18% GST would apply — but only on that small service fee. Not on your full transaction.
Example:
If you transfer ₹2,000 and the app charges ₹1 as a fee, the 18% GST would be on that ₹1 — which means you'd just pay ₹1.18 in total fee. That’s it.
Will This Actually Affect You?
Right now? Not really. For most people, UPI is still completely free. If you’re just sending money to a friend or paying a local shop — no charges. The only time you might see any charges is if you’re making super high-volume business transactions or using UPI way more than usual in a month.
Manish Kumar Goyal from Finkeda even warned that if the government or apps start adding charges on regular UPI usage, it could slow down digital progress. Especially in rural areas where people are just getting used to digital payments.
And honestly, he’s got a point. If UPI starts getting expensive, a lot of people might just go back to using cash. That’d be a step backward after all the progress we’ve made.
The Government Still Wants People to Use Digital Payments
Let’s not forget, India has been pushing pretty hard to go digital. UPI is kind of the backbone of that movement. In fact, just in March 2025 alone, UPI handled transactions worth over ₹24.77 lakh crore. That’s huge.
There’s no official announcement or notification from the government about GST being charged on personal UPI payments. They’re still encouraging people to use UPI, not make it harder.
And even if someday small service fees show up, they’ll likely be on specific business-type transactions — not when you’re sending ₹500 to your cousin or buying veggies.
What’s the Final Word?
Here’s the bottom line:
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No, there’s no 18% GST being added to your UPI transfers.
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GST would only apply to service charges, if UPI apps ever decide to add those.
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Regular peer-to-peer payments and small business transactions are still free.
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Government hasn't issued any rule that changes this for now.
