UPI will remain free for consumers, Nirmala Sitharaman tells Rajya Sabha
The Rajya Sabha completed passage of the Taxation and Other Laws (Amendment) Bill, 2026, which had already been passed by the Lok Sabha, by returning it after discussion
The Bill amends the Payment and Settlement Systems Act, 2007, the Income-tax Act, 2025, and the Finance Act, 2026
It was clarified in the House that the amendment is an enabling provision only and does not itself impose any charge on UPI transactions; ordinary consumer and small-merchant UPI payments will continue to remain free
The Rajya Sabha also passed the Bankers' Books Evidence Bill, 2026, which replaces the 1891-era law governing admissibility of bank records as evidence, giving explicit legal recognition to electronic and digital banking records
Money Bill Procedure (Article 110) and the Rajya Sabha's Limited Role
Article 110 of the Constitution defines a Money Bill as one dealing exclusively with matters such as taxation, borrowing by the Government, or the Consolidated Fund of India. Only the Lok Sabha can introduce a Money Bill, and only on the recommendation of the President. The Speaker of the Lok Sabha has final authority to certify whether a bill is a Money Bill, and this certification cannot be questioned in court.
Key Details
- The Rajya Sabha cannot reject or amend a Money Bill — it may only make recommendations and must return the Bill to the Lok Sabha within 14 days
- The Lok Sabha is free to accept or reject any Rajya Sabha recommendation; if the Rajya Sabha does not act within 14 days, the Bill is deemed passed in its original form
- This is distinct from an Ordinary Bill, which requires passage by both Houses with equal power to amend or reject, and can go to a joint sitting (Article 108) in case of deadlock — a mechanism unavailable for Money Bills
- A Finance Bill (Article 117) may contain both money-related and other provisions and is not automatically a Money Bill unless certified as such
The Taxation and Other Laws (Amendment) Bill, 2026 was processed as a Money Bill — the Rajya Sabha's role was limited to discussion and recommendation before "returning" it to the Lok Sabha, rather than voting to pass it as an equal co-legislator, which is why news reports describe the Rajya Sabha as having "returned" rather than "passed" the Bill.
Zero-MDR Mandate — Section 10A of the Payment and Settlement Systems Act, 2007
Section 10A of the Payment and Settlement Systems Act, 2007 bars any bank or payment system provider from imposing a charge, directly or indirectly, on transactions made through electronic payment modes notified by the Central Government. This provision, along with a parallel mandate under the Income-tax Act, has kept UPI and RuPay debit card transactions free of Merchant Discount Rate (MDR) since January 2020.
Key Details
- The 2026 amendment replaces the blanket statutory prohibition on charges with a framework empowering the Central Government to notify by executive order which payment modes must remain free, rather than fixing the exemption in the statute itself
- The Payment and Settlement Systems Act, 2007 is the parent legislation under which the RBI regulates all payment systems in India, including UPI (operated by the National Payments Corporation of India)
- The government's clarification in the House was that the amendment creates enabling authority only; no MDR has been notified on UPI or RuPay transactions as a result of this Bill
The Finance Ministry's assurance in the Rajya Sabha that UPI will remain free directly concerns how this amended Section 10A will be used — the statutory zero-MDR guarantee is now a matter of executive notification rather than a fixed legislative bar, though no charge has been imposed under it.
Bankers' Books Evidence Bill, 2026 — Modernising Evidentiary Law for Banking Records
The Bankers' Books Evidence Act, 1891 governed how bank records could be produced and admitted as evidence in legal proceedings, predating digital record-keeping. The Bankers' Books Evidence Bill, 2026 replaces this colonial-era statute, expanding the definition of "bankers' books" to explicitly cover records maintained in electronic, digital, virtual, or cloud-based form, whether stored on-site or off-site.
Key Details
- The Bill provides that an electronic or digital record of a banker's book is admissible, valid, and legally enforceable as evidence, subject to prescribed conditions, removing prior ambiguity about digital banking records in court
- It complements the Bharatiya Sakshya Adhiniyam, 2023 (which replaced the Indian Evidence Act, 1872, effective July 1, 2024), under which electronic records were elevated from secondary to primary evidence
- The Bill introduces a "special cause" standard that courts must apply before compelling production of bank records, balancing evidentiary needs against banking confidentiality
- The Lok Sabha passed the Bill on August 5, 2026, before Rajya Sabha clearance on August 10, 2026
Passage of the Bankers' Books Evidence Bill, 2026 in the same Rajya Sabha sitting reflects a broader legislative push to align evidentiary and financial-sector laws with digital banking practice, alongside the Bharatiya Sakshya Adhiniyam's primary-evidence status for electronic records.
- Zero-MDR mandate for UPI and RuPay debit cards in effect since: January 1, 2020
- Money Bill return period for the Rajya Sabha under Article 110: 14 days
- Bankers' Books Evidence Act, 1891 being replaced: 135 years old
- Bharatiya Sakshya Adhiniyam, 2023 came into effect: July 1, 2024 (replacing the Indian Evidence Act, 1872)
- Lok Sabha passage of Bankers' Books Evidence Bill, 2026: August 5, 2026; Rajya Sabha passage: August 10, 2026
- Acts amended by the Taxation and Other Laws (Amendment) Bill, 2026: Payment and Settlement Systems Act 2007, Income-tax Act 2025, Finance Act 2026