New Delhi [India], August 10 (ANI): Aam Aadmi Party (AAP) MP Sanjay Singh on Monday said that The Taxation and Other Laws (Amendment) Bill, 2026 which was passed in Parliament today has been brought under the pressure from US President Donald Trump adding that Finance Minister Nirmala Sitharaman has still not been able to give a convincing answer whether there will be taxation on UPI transactions.
Singh said that the government is presenting a very dubious stand on the issue.
“Although the Finance Minister clarified that there will be no tax on UPI payments from small traders, this is a very contradictory and misleading statement as earlier she said a committee would be formed to decide how much tax to take from traders. We have read the entire bill, and it doesn’t say that anywhere. This bill has been brought under pressure from Donald Trump, as Indians had significantly stopped using Visa and Mastercard, and their business was getting hit. They were not making profits. UPI payments are free; hence, Trump asked the government to tax UPI,” AAP MP said.
Expressing concern over the cascading effect of such a tax, Singh stated that any burden placed on traders would eventually be borne by the common man.
“If a tax is imposed on traders, it will be recovered from the public only. This is an indirect hit on the pockets of the common people who have shifted to digital payments,” the MP added.
Parliament passed the Taxation and Other Laws (Amendment) Bill, 2026, after the Rajya Sabha returned the Money Bill to the Lok Sabha following discussion, with Finance Minister Nirmala Sitharaman assuring that consumers and small merchants will not have to pay Merchant Discount Rate (MDR) charges on UPI transactions.
The Lok Sabha had earlier passed the Bill. As it is a Money Bill, the Rajya Sabha can only make recommendations on its provisions and return it to the Lok Sabha, which may accept or reject those recommendations.
Replying to the discussion in the Rajya Sabha, Sitharaman said the UPI-related amendment is only an enabling provision and does not itself impose any tax or transaction charge on users.
“The enabling provision that we are bringing in today does not impose any tax or transaction charge on UPI users,” Sitharaman said, adding that it enables the government to specify through notification the electronic payment modes that will continue to receive statutory protection against charges.
She also said that no MDR framework has yet been finalised. (ANI)