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Two important UPI changes to take place from 1st January 2024


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As we approach the New Year, significant changes are set to take place within the UPI (Unified Payments Interface) framework. Commencing on January 1, 2024, users may experience alterations affecting their UPI IDs due to new rules implemented by the National Payments Corporation of India (NPCI). It’s essential to be aware of these changes to ensure a smooth transition into the upcoming year.

1st: Inactive UPI IDs to get Disabled

Firstly, the NPCI has issued a circular instructing digital payment providers to deactivate UPI IDs that have remained inactive for over a year. Users with such inactive UPI IDs have until December 31, 2023, to reactivate them; otherwise, they risk having their UPI IDs permanently deleted. While this may sound alarming, it’s important to understand the process.

Digital payment service providers and third-party apps will identify UPI IDs that have been inactive for over a year and disable them specifically for inward transactions. This means that if your UPI ID falls into this category, you can still make payments, but you won’t be able to receive money on that particular disabled ID.

2nd: UPI Tap and Pay

Moving on to the second key change, the NPCI is gearing up to introduce the ‘UPI Tap and Pay’ feature across digital payment providers. This feature represents a departure from the traditional method of using smartphones’ cameras and QR codes for UPI payments. According to recent communications, the NPCI has outlined a plan to make the ‘UPI Tap and Pay’ feature available to UPI users by January 31, 2024. However, it’s crucial to note that this deadline serves as a recommendation for digital payment firms, offering flexibility in their implementation timelines.

The ‘UPI Tap and Pay’ feature will leverage near-field communication (NFC) technology for transactions. Instead of relying on QR codes, smartphones with NFC capabilities will be able to use this feature. The NFC technology facilitates the secure transfer of information between devices when they are in close proximity, providing a seamless and efficient payment experience.

Other important changes from 1st January 2024

Paperless KYC for SIM cardsOn the first day of the new year, the existing process of paper-based Know Your Customer (KYC) process will be replaced by paperless KYC. Rules for new mobile connections, however, remain unchanged.

Income tax returnsDecember 31 is the deadline for both belated and revised ITRs (July 31 was the deadline for regular ITRs). Taxpayers filing belated returns must pay a maximum penalty of ₹5000, but the process is free of cost for those submitting revised ones.

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