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VOL. I · EST. 11.2025 
SatyaDheesh
सत्याधीश
India's Ground Truth Record
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Lok Sabha passes tax bill with MDR-free UPI for consumers and small merchants

GS3Economy · S&T · Environment · Security· Fiscal policy, budget & taxation (GST)· Prelims + Mains·

Why in news

The Lok Sabha passed the Taxation and Other Laws (Amendment) Bill, 2026, which includes a key provision to waive Merchant Discount Rate (MDR) charges on UPI for consumers and small merchants.

Background

The Taxation and Other Laws (Amendment) Bill, 2026 was passed by the Lok Sabha after being returned by the Rajya Sabha. It includes tax exemptions for data centers, incentives for diamond trading, and support for electronics manufacturing.

Facts for Prelims

  • Act / BillTaxation and Other Laws (Amendment) Bill, 2026
  • FactMDR (Merchant Discount Rate) will be waived for consumers and small merchants using UPI
  • FactThe bill provides tax exemptions for data centers and incentives for diamond trading
  • BodyLok Sabha and Rajya Sabha are the two houses of the Indian Parliament

For Mains

Q. Discuss how the removal of MDR charges on UPI and tax exemptions for data centers can contribute to India's goal of becoming a global digital economy.

Dimensions to cover in your answer

  • Ease of doing business
  • Digital public infrastructure (DPI) growth
  • Incentivizing domestic manufacturing
  • Financial inclusion for small merchants

Keywords: Ease of Doing Business · Digital Public Infrastructure · Fiscal Incentives · Financial Inclusion · Taxation Policy

Full chronology for revision →Read the full news →Report a mistake in this noteSource: NDTV ↗Also: GS2 · Bills, Acts & ordinancesAlso: GS3 · IT, AI, semiconductors & computing

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