diff --git a/lib/core/utils/hive_bootstrap.dart b/lib/core/utils/hive_bootstrap.dart
index acfd7b5..48fdd52 100644
--- a/lib/core/utils/hive_bootstrap.dart
+++ b/lib/core/utils/hive_bootstrap.dart
@@ -3,6 +3,7 @@ import 'package:hive_flutter/hive_flutter.dart';
 import '../../features/expense/data/datasource/account_local_datasource.dart';
 import '../../features/expense/data/datasource/budget_local_datasource.dart';
 import '../../features/expense/data/datasource/expense_local_datasource.dart';
+import '../../features/expense/data/datasource/month_budget_local_datasource.dart';
 import '../../features/expense/data/datasource/preferences_local_datasource.dart';
 import '../../features/expense/data/datasource/recurring_subscription_local_datasource.dart';
 import '../../features/expense/data/models/account_model.dart';
@@ -52,5 +53,8 @@ abstract final class HiveBootstrap {
         RecurringSubscriptionLocalDatasource.boxName,
       );
     }
+    if (!Hive.isBoxOpen(MonthBudgetLocalDatasource.boxName)) {
+      await Hive.openBox<double>(MonthBudgetLocalDatasource.boxName);
+    }
   }
 }
diff --git a/lib/features/expense/data/datasource/month_budget_local_datasource.dart b/lib/features/expense/data/datasource/month_budget_local_datasource.dart
new file mode 100644
index 0000000..29d9fb6
--- /dev/null
+++ b/lib/features/expense/data/datasource/month_budget_local_datasource.dart
@@ -0,0 +1,79 @@
+import 'package:hive/hive.dart';
+
+/// Hive-backed store for **per-month** budget data using a plain [Box<double>].
+///
+/// Key conventions:
+///   * Total monthly budget → `"__total__::YYYY-MM"`
+///   * Category override    → `"YYYY-MM::CategoryName"`
+class MonthBudgetLocalDatasource {
+  static const String boxName = 'month_budgets';
+  static const String _kTotalPrefix = '__total__::';
+
+  Box<double> get _box => Hive.box<double>(boxName);
+
+  // ── total budget ──────────────────────────────────────────────────────────
+
+  double? getMonthTotalBudget(String monthKey) =>
+      _box.get('$_kTotalPrefix$monthKey');
+
+  Future<void> saveMonthTotalBudget(String monthKey, double amount) =>
+      _box.put('$_kTotalPrefix$monthKey', amount);
+
+  // ── per-category overrides ─────────────────────────────────────────────────
+
+  /// Returns category budget overrides stored for [monthKey].
+  ///
+  /// This scans all box keys, so prefer calling [loadAll] once at startup to
+  /// build a complete in-memory snapshot rather than calling this repeatedly.
+  Map<String, double> getCategoryBudgetsForMonth(String monthKey) {
+    final prefix = '$monthKey::';
+    final result = <String, double>{};
+    for (final rawKey in _box.keys) {
+      final key = rawKey as String;
+      if (key.startsWith(prefix)) {
+        final value = _box.get(key);
+        if (value != null) {
+          result[key.substring(prefix.length)] = value;
+        }
+      }
+    }
+    return result;
+  }
+
+  Future<void> saveCategoryBudgetForMonth(
+    String monthKey,
+    String category,
+    double amount,
+  ) =>
+      _box.put('$monthKey::$category', amount);
+
+  // ── bulk load ──────────────────────────────────────────────────────────────
+
+  /// Returns every stored entry as two maps so the provider layer can build
+  /// its in-memory state without scanning the box again later.
+  ({
+    Map<String, double> totalBudgets,
+    Map<String, Map<String, double>> categoryBudgets,
+  }) loadAll() {
+    final totalBudgets = <String, double>{};
+    final categoryBudgets = <String, Map<String, double>>{};
+
+    for (final rawKey in _box.keys) {
+      final key = rawKey as String;
+      final value = _box.get(key);
+      if (value == null) continue;
+
+      if (key.startsWith(_kTotalPrefix)) {
+        totalBudgets[key.substring(_kTotalPrefix.length)] = value;
+      } else {
+        final sep = key.indexOf('::');
+        if (sep == -1) continue;
+        final monthKey = key.substring(0, sep);
+        final category = key.substring(sep + 2);
+        (categoryBudgets[monthKey] ??= {})[category] = value;
+      }
+    }
+
+    return (totalBudgets: totalBudgets, categoryBudgets: categoryBudgets);
+  }
+}
diff --git a/lib/features/expense/presentation/provider/budget_state.dart b/lib/features/expense/presentation/provider/budget_state.dart
new file mode 100644
index 0000000..7b0d0ea
--- /dev/null
+++ b/lib/features/expense/presentation/provider/budget_state.dart
@@ -0,0 +1,226 @@
+import 'dart:developer' as dev;
+
+import 'package:flutter/foundation.dart';
+import 'package:flutter_riverpod/flutter_riverpod.dart';
+
+import '../../data/datasource/month_budget_local_datasource.dart';
+import '../../data/models/expense_model.dart';
+import 'budget_providers.dart';
+import 'expense_providers.dart';
+
+// ── helpers ───────────────────────────────────────────────────────────────────
+
+/// Normalised "YYYY-MM" string for a given month.
+String monthKeyOf(DateTime dt) =>
+    '${dt.year}-${dt.month.toString().padLeft(2, '0')}';
+
+// ── selected month ────────────────────────────────────────────────────────────
+
+/// The currently-viewed month (always normalised to the 1st of that month).
+final selectedMonthProvider =
+    NotifierProvider<SelectedMonthNotifier, DateTime>(
+  SelectedMonthNotifier.new,
+);
+
+class SelectedMonthNotifier extends Notifier<DateTime> {
+  @override
+  DateTime build() {
+    final now = DateTime.now();
+    return DateTime(now.year, now.month);
+  }
+}
+
+// ── datasource provider ───────────────────────────────────────────────────────
+
+final monthBudgetDatasourceProvider =
+    Provider<MonthBudgetLocalDatasource>((ref) {
+  return MonthBudgetLocalDatasource();
+});
+
+// ── state model ───────────────────────────────────────────────────────────────
+
+class MonthBudgetState {
+  const MonthBudgetState({
+    this.totalBudgets = const {},
+    this.categoryBudgets = const {},
+  });
+
+  /// monthKey → total spending budget for that month.
+  final Map<String, double> totalBudgets;
+
+  /// monthKey → { categoryName → monthly limit }.
+  final Map<String, Map<String, double>> categoryBudgets;
+
+  double? totalForMonth(String monthKey) => totalBudgets[monthKey];
+
+  Map<String, double> categoriesForMonth(String monthKey) =>
+      categoryBudgets[monthKey] ?? const {};
+
+  MonthBudgetState copyWith({
+    Map<String, double>? totalBudgets,
+    Map<String, Map<String, double>>? categoryBudgets,
+  }) =>
+      MonthBudgetState(
+        totalBudgets: totalBudgets ?? this.totalBudgets,
+        categoryBudgets: categoryBudgets ?? this.categoryBudgets,
+      );
+}
+
+// ── notifier ──────────────────────────────────────────────────────────────────
+
+class MonthBudgetNotifier extends AsyncNotifier<MonthBudgetState> {
+  MonthBudgetLocalDatasource get _ds =>
+      ref.read(monthBudgetDatasourceProvider);
+
+  @override
+  Future<MonthBudgetState> build() async {
+    try {
+      final raw = _ds.loadAll();
+      return MonthBudgetState(
+        totalBudgets: Map<String, double>.from(raw.totalBudgets),
+        categoryBudgets: {
+          for (final entry in raw.categoryBudgets.entries)
+            entry.key: Map<String, double>.from(entry.value),
+        },
+      );
+    } catch (e, st) {
+      if (kDebugMode) {
+        dev.log('MonthBudgetNotifier.build failed',
+            error: e, stackTrace: st, name: 'MonthBudgetNotifier');
+      }
+      return const MonthBudgetState();
+    }
+  }
+
+  Future<void> saveMonthTotal(DateTime month, double amount) async {
+    try {
+      final key = monthKeyOf(month);
+      await _ds.saveMonthTotalBudget(key, amount);
+      final current = state.value ?? const MonthBudgetState();
+      final updatedTotals = Map<String, double>.from(current.totalBudgets)
+        ..[key] = amount;
+      state = AsyncData(current.copyWith(totalBudgets: updatedTotals));
+    } catch (e, st) {
+      if (kDebugMode) {
+        dev.log('saveMonthTotal failed',
+            error: e, stackTrace: st, name: 'MonthBudgetNotifier');
+      }
+    }
+  }
+
+  Future<void> copyFromPreviousMonth(DateTime targetMonth) async {
+    try {
+      final prevMonth =
+          DateTime(targetMonth.year, targetMonth.month - 1);
+      final prevKey = monthKeyOf(prevMonth);
+      final targetKey = monthKeyOf(targetMonth);
+
+      final current = state.value ?? const MonthBudgetState();
+
+      // Copy total budget
+      final prevTotal = current.totalForMonth(prevKey);
+
+      // Copy category budgets: month-specific overrides take precedence over
+      // global defaults; if no previous month-specific budgets exist, fall
+      // back to the global budgets.
+      final globalBudgets =
+          ref.read(budgetTargetsProvider).value ?? defaultBudgetTargets;
+      final prevCategoryOverrides = current.categoriesForMonth(prevKey);
+      final sourceBudgets = <String, double>{
+        ...globalBudgets,
+        ...prevCategoryOverrides,
+      };
+
+      // Persist to Hive
+      if (prevTotal != null) {
+        await _ds.saveMonthTotalBudget(targetKey, prevTotal);
+      }
+      for (final entry in sourceBudgets.entries) {
+        await _ds.saveCategoryBudgetForMonth(
+            targetKey, entry.key, entry.value);
+      }
+
+      // Update in-memory state
+      final updatedTotals = Map<String, double>.from(current.totalBudgets);
+      if (prevTotal != null) updatedTotals[targetKey] = prevTotal;
+
+      final updatedCategories = {
+        for (final e in current.categoryBudgets.entries)
+          e.key: Map<String, double>.from(e.value),
+      };
+      updatedCategories[targetKey] = Map<String, double>.from(sourceBudgets);
+
+      state = AsyncData(current.copyWith(
+        totalBudgets: updatedTotals,
+        categoryBudgets: updatedCategories,
+      ));
+    } catch (e, st) {
+      if (kDebugMode) {
+        dev.log('copyFromPreviousMonth failed',
+            error: e, stackTrace: st, name: 'MonthBudgetNotifier');
+      }
+    }
+  }
+}
+
+final monthBudgetProvider =
+    AsyncNotifierProvider<MonthBudgetNotifier, MonthBudgetState>(
+  MonthBudgetNotifier.new,
+);
+
+// ── derived providers ─────────────────────────────────────────────────────────
+
+/// Expense + income stats scoped to the selected month.
+final monthlyStatsForMonthProvider = Provider<ExpenseStats>((ref) {
+  final expenses =
+      ref.watch(expenseListProvider).value ?? const <ExpenseModel>[];
+  final month = ref.watch(selectedMonthProvider);
+  return ExpenseStats.fromExpenses(expenses, forMonth: month);
+});
+
+/// Total spending budget set for the selected month (may be null if not set).
+final monthTotalBudgetProvider = Provider<double?>((ref) {
+  final month = ref.watch(selectedMonthProvider);
+  final budgetState = ref.watch(monthBudgetProvider).value;
+  return budgetState?.totalForMonth(monthKeyOf(month));
+});
+
+/// How much remains in the selected month's total budget.
+/// Returns null when no total budget has been set.
+final monthRemainingBudgetProvider = Provider<double?>((ref) {
+  final total = ref.watch(monthTotalBudgetProvider);
+  if (total == null) return null;
+  final stats = ref.watch(monthlyStatsForMonthProvider);
+  return total - stats.monthTotal;
+});
+
+/// Effective category budgets for the selected month.
+/// Month-specific overrides shadow the global per-category limits.
+final effectiveMonthBudgetsProvider = Provider<Map<String, double>>((ref) {
+  final globalBudgets =
+      ref.watch(budgetTargetsProvider).value ?? defaultBudgetTargets;
+  final month = ref.watch(selectedMonthProvider);
+  final budgetState = ref.watch(monthBudgetProvider).value;
+  final monthOverrides =
+      budgetState?.categoriesForMonth(monthKeyOf(month)) ?? const {};
+  return <String, double>{...globalBudgets, ...monthOverrides};
+});
+
+// ── controller ────────────────────────────────────────────────────────────────
+
+class MonthBudgetController {
+  MonthBudgetController(this._ref);
+
+  final Ref _ref;
+
+  Future<void> saveMonthTotal(DateTime month, double amount) =>
+      _ref.read(monthBudgetProvider.notifier).saveMonthTotal(month, amount);
+
+  Future<void> copyFromPreviousMonth(DateTime targetMonth) => _ref
+      .read(monthBudgetProvider.notifier)
+      .copyFromPreviousMonth(targetMonth);
+}
+
+final monthBudgetControllerProvider = Provider<MonthBudgetController>((ref) {
+  return MonthBudgetController(ref);
+});
diff --git a/lib/features/expense/presentation/provider/expense_providers.dart b/lib/features/expense/presentation/provider/expense_providers.dart
index 917cebc..76fd2af 100644
--- a/lib/features/expense/presentation/provider/expense_providers.dart
+++ b/lib/features/expense/presentation/provider/expense_providers.dart
@@ -297,10 +297,16 @@ class ExpenseStats {
     required this.incomeCategoryTotals,
   });
 
-  factory ExpenseStats.fromExpenses(List<ExpenseModel> expenses) {
+  factory ExpenseStats.fromExpenses(
+    List<ExpenseModel> expenses, {
+    DateTime? forMonth,
+  }) {
     final now = DateTime.now();
-    final int currentYear = now.year;
-    final int currentMonth = now.month;
+    final reference = forMonth ?? now;
+    final int currentYear = reference.year;
+    final int currentMonth = reference.month;
+    final bool isCurrentMonth =
+        reference.year == now.year && reference.month == now.month;
     final int currentDay = now.day;
 
     int transactionCount = 0;
@@ -333,7 +339,8 @@ class ExpenseStats {
           ifAbsent: () => amount,
         );
 
-        final bool isToday = localDate.day == currentDay;
+        final bool isToday =
+            isCurrentMonth && localDate.day == currentDay;
 
         if (isIncome) {
           monthIncomeTotal += amount;
diff --git a/lib/features/expense/presentation/screens/add_expense_screen.dart b/lib/features/expense/presentation/screens/add_expense_screen.dart
index acd5031..685ff8b 100644
--- a/lib/features/expense/presentation/screens/add_expense_screen.dart
+++ b/lib/features/expense/presentation/screens/add_expense_screen.dart
@@ -37,16 +37,19 @@ class AddExpenseScreen extends ConsumerStatefulWidget {
   final String? initialToAccountId;
   final TransactionType initialType;
 
-  /// When non-null the screen starts in "Pay Directly" mode.
+  /// When non-null the screen starts in "Pay via UPI" mode.
   ///
-  /// The save button is replaced with a **Pay** button that launches the UPI
-  /// deep-link.  After the user returns from the UPI app the button
-  /// automatically reverts to the normal save/check button.
+  /// The save button is replaced with an **Open UPI App** button that hands
+  /// the user off to their preferred UPI app with only the payee VPA
+  /// (no pre-filled amount), avoiding the fraud-score spike that
+  /// externally-injected payment requests trigger in GPay / PhonePe / Paytm.
+  /// After the user returns from the UPI app, a "Did the payment go through?"
+  /// dialog is shown before the transaction is saved.
   final String? payUpiUri;
 
   bool get isEditing => expenseId != null;
 
-  /// Whether the screen was opened for the "Pay Directly" flow.
+  /// Whether the screen was opened for the "Pay via UPI" flow.
   bool get isPayMode => payUpiUri != null;
 
   @override
@@ -67,12 +70,16 @@ class _AddExpenseScreenState extends ConsumerState<AddExpenseScreen>
   late bool _hasExplicitAccountChoice;
   bool _isSaving = false;
 
-  /// True once the user has returned from the UPI app (pay-mode only).
+  /// True once the user has returned from the UPI app AND confirmed the payment.
   bool _paymentDone = false;
 
   /// True while the UPI launch is in progress.
   bool _isLaunching = false;
 
+  /// Set when the app resumes after a UPI-app handoff so the post-frame
+  /// callback can show the "Did the payment go through?" dialog.
+  bool _pendingPaymentConfirm = false;
+
   @override
   void initState() {
     super.initState();
@@ -127,16 +134,52 @@ class _AddExpenseScreenState extends ConsumerState<AddExpenseScreen>
 
   @override
   void didChangeAppLifecycleState(AppLifecycleState state) {
-    // When the user returns from the UPI app, switch the button to Save.
+    // When the user returns from the UPI app, schedule a confirmation dialog.
     if (widget.isPayMode &&
         !_paymentDone &&
         _isLaunching &&
         state == AppLifecycleState.resumed) {
       setState(() {
-        _paymentDone = true;
         _isLaunching = false;
+        _pendingPaymentConfirm = true;
       });
+      WidgetsBinding.instance
+          .addPostFrameCallback((_) => _askPaymentConfirmation());
+    }
+  }
+
+  Future<void> _askPaymentConfirmation() async {
+    if (!mounted || !_pendingPaymentConfirm) return;
+    setState(() => _pendingPaymentConfirm = false);
+
+    final confirmed = await showDialog<bool>(
+      context: context,
+      barrierDismissible: false,
+      builder: (ctx) => AlertDialog(
+        title: const Text('Payment Complete?'),
+        content: const Text(
+          'Did the payment go through in your UPI app?',
+        ),
+        actions: <Widget>[
+          TextButton(
+            onPressed: () => Navigator.of(ctx).pop(false),
+            child: const Text('No, Retry'),
+          ),
+          FilledButton(
+            onPressed: () => Navigator.of(ctx).pop(true),
+            child: const Text('Yes, Save'),
+          ),
+        ],
+      ),
+    );
+
+    if (!mounted) return;
+    if (confirmed == true) {
+      setState(() => _paymentDone = true);
+      _saveExpense();
     }
+    // If "No, Retry", _paymentDone stays false and the "Pay via UPI" button
+    // is shown again.
   }
 
   @override
@@ -507,8 +550,8 @@ class _AddExpenseScreenState extends ConsumerState<AddExpenseScreen>
                             foregroundColor: const Color(0xFFC23358),
                             child: const Icon(Icons.backspace_outlined),
                           ),
-                          // Pay Directly mode: show "Pay" before payment,
-                          // then revert to the normal save/check button.
+                          // Pay via UPI mode: show "Open UPI App" button before
+                          // the payment, then revert to the normal save button.
                           if (widget.isPayMode && !_paymentDone)
                             AddExpenseKeypadButton(
                               onTap: canSubmit ? _launchUpiPayment : null,
@@ -1088,23 +1131,78 @@ class _AddExpenseScreenState extends ConsumerState<AddExpenseScreen>
   Future<void> _launchUpiPayment() async {
     if (_isLaunching || widget.payUpiUri == null) return;
 
-    // Build a fresh URI with the current amount so the UPI app pre-fills it.
-    final amountState = evaluateAmountExpression(_amountExpression);
     final baseUri = Uri.parse(widget.payUpiUri!);
-    final updatedParams = Map<String, String>.from(baseUri.queryParameters);
-    if (amountState.previewAmount > 0) {
-      updatedParams['am'] = amountState.previewAmount.toStringAsFixed(2);
-    }
-    if (_noteController.text.trim().isNotEmpty) {
-      updatedParams['tn'] = _noteController.text.trim();
+    final params = Map<String, String>.from(baseUri.queryParameters);
+
+    // Validate that payee VPA (pa) is present — mandatory for any UPI app.
+    final paRaw = params['pa'];
+    final pa = paRaw?.trim() ?? '';
+    if (pa.isEmpty) {
+      ScaffoldMessenger.of(context).showSnackBar(
+        const SnackBar(
+          content: Text('Invalid QR: payee UPI ID is missing.'),
+        ),
+      );
+      return;
     }
+
+    // Build a "safe" launch URI with ONLY pa + pn.
+    // Omitting am/tn/cu avoids the fraud-score spike that most UPI apps
+    // apply to externally-prefilled payment requests.  The user enters the
+    // amount themselves inside their trusted payment app.
+    final safeParams = <String, String>{'pa': pa};
+    final pn = params['pn']?.trim();
+    if (pn != null && pn.isNotEmpty) safeParams['pn'] = pn;
+
     final launchUri = Uri(
       scheme: baseUri.scheme,
       host: baseUri.host,
       path: baseUri.path,
-      queryParameters: updatedParams,
+      queryParameters: safeParams,
     );
 
+    final payeeName = pn ?? pa;
+    final amountState = evaluateAmountExpression(_amountExpression);
+    // Build an optional hint shown in the dialog body. Leading space is
+    // intentional — it is appended directly to the "pay $payeeName." sentence.
+    final amountHint = amountState.previewAmount > 0
+        ? ' Enter ₹${amountState.previewAmount.toStringAsFixed(2)} when prompted.'
+        : '';
+
+    if (!mounted) return;
+    final confirmed = await showDialog<bool>(
+      context: context,
+      builder: (ctx) => AlertDialog(
+        title: const Text('Open UPI App'),
+        content: Column(
+          mainAxisSize: MainAxisSize.min,
+          crossAxisAlignment: CrossAxisAlignment.start,
+          children: <Widget>[
+            Text(
+              'Your UPI app will open to pay $payeeName.$amountHint',
+            ),
+            const SizedBox(height: 8),
+            Text(
+              'UPI ID: $pa',
+              style: const TextStyle(fontSize: 13, color: Colors.grey),
+            ),
+          ],
+        ),
+        actions: <Widget>[
+          TextButton(
+            onPressed: () => Navigator.of(ctx).pop(false),
+            child: const Text('Cancel'),
+          ),
+          TextButton(
+            onPressed: () => Navigator.of(ctx).pop(true),
+            child: const Text('Open'),
+          ),
+        ],
+      ),
+    );
+
+    if (confirmed != true || !mounted) return;
+
     setState(() => _isLaunching = true);
 
     final launched = await launchUrl(
@@ -1123,8 +1221,8 @@ class _AddExpenseScreenState extends ConsumerState<AddExpenseScreen>
         ),
       );
     }
-    // If launched successfully, _isLaunching stays true until
-    // didChangeAppLifecycleState(resumed) fires when the user returns.
+    // If launched, _isLaunching stays true until didChangeAppLifecycleState
+    // fires on resume, which schedules the "Payment Complete?" dialog.
   }
 
   Future<void> _saveExpense() async {
diff --git a/lib/features/expense/presentation/screens/categories/budget_popup.dart b/lib/features/expense/presentation/screens/categories/budget_popup.dart
new file mode 100644
index 0000000..0c7f5bd
--- /dev/null
+++ b/lib/features/expense/presentation/screens/categories/budget_popup.dart
@@ -0,0 +1,348 @@
+import 'package:flutter/material.dart';
+import 'package:intl/intl.dart';
+
+import '../../../../../core/theme/app_colors.dart';
+import '../../../../../core/theme/app_tokens.dart';
+import '../../../../../core/utils/context_extensions.dart';
+
+/// Shows the "Set Monthly Budget" bottom sheet.
+///
+/// The sheet offers two actions:
+///   1. **Enter Manually** – reveals an amount input and a Save button.
+///   2. **Copy Previous Month** – immediately copies the previous month's
+///      total budget and category limits into [selectedMonth].
+Future<void> showSetBudgetPopup(
+  BuildContext context, {
+  required DateTime selectedMonth,
+  required String currencySymbol,
+  required double? currentTotal,
+  required Future<void> Function(double amount) onManual,
+  required Future<void> Function() onCopyPrevious,
+}) {
+  return showModalBottomSheet<void>(
+    context: context,
+    isScrollControlled: true,
+    backgroundColor: Colors.transparent,
+    builder: (_) => _SetBudgetPopup(
+      selectedMonth: selectedMonth,
+      currencySymbol: currencySymbol,
+      currentTotal: currentTotal,
+      onManual: onManual,
+      onCopyPrevious: onCopyPrevious,
+    ),
+  );
+}
+
+// ── private widget ────────────────────────────────────────────────────────────
+
+class _SetBudgetPopup extends StatefulWidget {
+  const _SetBudgetPopup({
+    required this.selectedMonth,
+    required this.currencySymbol,
+    required this.currentTotal,
+    required this.onManual,
+    required this.onCopyPrevious,
+  });
+
+  final DateTime selectedMonth;
+  final String currencySymbol;
+  final double? currentTotal;
+  final Future<void> Function(double) onManual;
+  final Future<void> Function() onCopyPrevious;
+
+  @override
+  State<_SetBudgetPopup> createState() => _SetBudgetPopupState();
+}
+
+class _SetBudgetPopupState extends State<_SetBudgetPopup> {
+  bool _showManualEntry = false;
+  bool _saving = false;
+  late final TextEditingController _amountController;
+
+  @override
+  void initState() {
+    super.initState();
+    _amountController = TextEditingController(
+      text: widget.currentTotal != null
+          ? widget.currentTotal!.toStringAsFixed(0)
+          : '',
+    );
+  }
+
+  @override
+  void dispose() {
+    _amountController.dispose();
+    super.dispose();
+  }
+
+  String get _monthLabel =>
+      DateFormat('MMMM yyyy').format(widget.selectedMonth);
+
+  String get _previousMonthLabel {
+    final prev = DateTime(
+        widget.selectedMonth.year, widget.selectedMonth.month - 1);
+    return DateFormat('MMMM yyyy').format(prev);
+  }
+
+  Future<void> _handleManualSave() async {
+    final raw = _amountController.text.trim();
+    final amount = double.tryParse(raw);
+    if (amount == null || amount < 0) {
+      context.showSnackBar('Enter a valid budget amount.',
+          type: AppFeedbackType.error);
+      return;
+    }
+    setState(() => _saving = true);
+    try {
+      await widget.onManual(amount);
+      if (!mounted) return;
+      Navigator.of(context).pop();
+      context.showSnackBar('Budget saved for $_monthLabel.',
+          type: AppFeedbackType.success);
+    } finally {
+      if (mounted) setState(() => _saving = false);
+    }
+  }
+
+  Future<void> _handleCopyPrevious() async {
+    setState(() => _saving = true);
+    try {
+      await widget.onCopyPrevious();
+      if (!mounted) return;
+      Navigator.of(context).pop();
+      context.showSnackBar(
+        'Copied budget from $_previousMonthLabel to $_monthLabel.',
+        type: AppFeedbackType.success,
+      );
+    } finally {
+      if (mounted) setState(() => _saving = false);
+    }
+  }
+
+  @override
+  Widget build(BuildContext context) {
+    final viewInsets = MediaQuery.of(context).viewInsets;
+
+    return Padding(
+      padding: EdgeInsets.only(bottom: viewInsets.bottom),
+      child: Container(
+        padding: const EdgeInsets.fromLTRB(
+            AppSpacing.xl, AppSpacing.md, AppSpacing.xl, AppSpacing.xxl),
+        decoration: const BoxDecoration(
+          color: Colors.white,
+          borderRadius: BorderRadius.vertical(
+              top: Radius.circular(AppRadii.sheet)),
+        ),
+        child: Column(
+          mainAxisSize: MainAxisSize.min,
+          crossAxisAlignment: CrossAxisAlignment.start,
+          children: <Widget>[
+            // Drag handle
+            Center(
+              child: Container(
+                width: 46,
+                height: 4,
+                decoration: BoxDecoration(
+                  color: AppColors.backgroundLight,
+                  borderRadius: BorderRadius.circular(AppRadii.pill),
+                ),
+              ),
+            ),
+            const SizedBox(height: AppSpacing.lg),
+
+            // Title
+            const Text(
+              'Set Monthly Budget',
+              style: TextStyle(
+                color: AppColors.textDark,
+                fontSize: 22,
+                fontWeight: FontWeight.w900,
+              ),
+            ),
+            const SizedBox(height: 4),
+            Text(
+              _monthLabel,
+              style: const TextStyle(
+                color: AppColors.primaryBlue,
+                fontSize: 14,
+                fontWeight: FontWeight.w800,
+                letterSpacing: 0.4,
+              ),
+            ),
+            const SizedBox(height: AppSpacing.xl),
+
+            if (!_showManualEntry) ...<Widget>[
+              // Option 1: Enter Manually
+              _OptionTile(
+                icon: Icons.edit_rounded,
+                label: 'Enter Manually',
+                subtitle: 'Type a custom total budget for this month.',
+                onTap: _saving
+                    ? null
+                    : () => setState(() => _showManualEntry = true),
+              ),
+              const SizedBox(height: AppSpacing.sm),
+
+              // Option 2: Copy Previous Month
+              _OptionTile(
+                icon: Icons.content_copy_rounded,
+                label: 'Copy Previous Month',
+                subtitle:
+                    'Import budget & category limits from $_previousMonthLabel.',
+                onTap: _saving ? null : _handleCopyPrevious,
+                loading: _saving,
+              ),
+            ] else ...<Widget>[
+              // Manual amount entry
+              TextField(
+                controller: _amountController,
+                autofocus: true,
+                keyboardType:
+                    const TextInputType.numberWithOptions(decimal: true),
+                decoration: InputDecoration(
+                  labelText: 'Monthly budget',
+                  prefixText: '${widget.currencySymbol} ',
+                  filled: true,
+                  fillColor: AppColors.surfaceLight,
+                  border: OutlineInputBorder(
+                    borderRadius: BorderRadius.circular(AppRadii.md),
+                    borderSide: BorderSide.none,
+                  ),
+                ),
+              ),
+              const SizedBox(height: AppSpacing.md),
+              Row(
+                children: <Widget>[
+                  Expanded(
+                    child: OutlinedButton(
+                      onPressed:
+                          _saving ? null : () => setState(() => _showManualEntry = false),
+                      style: OutlinedButton.styleFrom(
+                        padding:
+                            const EdgeInsets.symmetric(vertical: AppSpacing.sm),
+                        shape: RoundedRectangleBorder(
+                          borderRadius: BorderRadius.circular(AppRadii.md),
+                        ),
+                      ),
+                      child: const Text('Back'),
+                    ),
+                  ),
+                  const SizedBox(width: AppSpacing.sm),
+                  Expanded(
+                    flex: 2,
+                    child: FilledButton(
+                      onPressed: _saving ? null : _handleManualSave,
+                      style: FilledButton.styleFrom(
+                        backgroundColor: AppColors.primaryBlue,
+                        padding:
+                            const EdgeInsets.symmetric(vertical: AppSpacing.sm),
+                        shape: RoundedRectangleBorder(
+                          borderRadius: BorderRadius.circular(AppRadii.md),
+                        ),
+                      ),
+                      child: _saving
+                          ? const SizedBox(
+                              width: 18,
+                              height: 18,
+                              child: CircularProgressIndicator(
+                                  strokeWidth: 2, color: Colors.white),
+                            )
+                          : const Text(
+                              'Save Budget',
+                              style:
+                                  TextStyle(fontWeight: FontWeight.w800),
+                            ),
+                    ),
+                  ),
+                ],
+              ),
+            ],
+          ],
+        ),
+      ),
+    );
+  }
+}
+
+// ── option tile ───────────────────────────────────────────────────────────────
+
+class _OptionTile extends StatelessWidget {
+  const _OptionTile({
+    required this.icon,
+    required this.label,
+    required this.subtitle,
+    this.onTap,
+    this.loading = false,
+  });
+
+  final IconData icon;
+  final String label;
+  final String subtitle;
+  final VoidCallback? onTap;
+  final bool loading;
+
+  @override
+  Widget build(BuildContext context) {
+    final radius = BorderRadius.circular(AppRadii.lg);
+    return Material(
+      color: AppColors.surfaceLight,
+      borderRadius: radius,
+      child: InkWell(
+        onTap: onTap,
+        borderRadius: radius,
+        child: Padding(
+          padding: const EdgeInsets.all(AppSpacing.md),
+          child: Row(
+            children: <Widget>[
+              Container(
+                width: 44,
+                height: 44,
+                decoration: BoxDecoration(
+                  color: AppColors.lightBlueBg,
+                  borderRadius: BorderRadius.circular(14),
+                ),
+                child: Icon(icon, color: AppColors.primaryBlue, size: 22),
+              ),
+              const SizedBox(width: AppSpacing.sm),
+              Expanded(
+                child: Column(
+                  crossAxisAlignment: CrossAxisAlignment.start,
+                  children: <Widget>[
+                    Text(
+                      label,
+                      style: const TextStyle(
+                        color: AppColors.textDark,
+                        fontSize: 15,
+                        fontWeight: FontWeight.w800,
+                      ),
+                    ),
+                    const SizedBox(height: 3),
+                    Text(
+                      subtitle,
+                      style: const TextStyle(
+                        color: AppColors.textSecondary,
+                        fontSize: 12,
+                        fontWeight: FontWeight.w600,
+                        height: 1.3,
+                      ),
+                    ),
+                  ],
+                ),
+              ),
+              const SizedBox(width: AppSpacing.xs),
+              if (loading)
+                const SizedBox(
+                  width: 18,
+                  height: 18,
+                  child: CircularProgressIndicator(strokeWidth: 2),
+                )
+              else
+                const Icon(Icons.chevron_right_rounded,
+                    color: AppColors.textMuted, size: 20),
+            ],
+          ),
+        ),
+      ),
+    );
+  }
+}
diff --git a/lib/features/expense/presentation/screens/categories/categories_widgets.dart b/lib/features/expense/presentation/screens/categories/categories_widgets.dart
index c4895d9..ca186c2 100644
--- a/lib/features/expense/presentation/screens/categories/categories_widgets.dart
+++ b/lib/features/expense/presentation/screens/categories/categories_widgets.dart
@@ -188,6 +188,218 @@ class AddCategoryCard extends StatelessWidget {
   }
 }
 
+class CategoryListCard extends StatelessWidget {
+  const CategoryListCard({
+    super.key,
+    required this.title,
+    required this.icon,
+    required this.tone,
+    required this.amount,
+    required this.progress,
+    required this.isEnabled,
+    required this.onToggle,
+    this.onTap,
+    this.progressLabel,
+    this.amountColor,
+  });
+
+  final String title;
+  final IconData icon;
+  final Color tone;
+  final String amount;
+  final String? progressLabel;
+  final double progress;
+  final bool isEnabled;
+  final VoidCallback? onTap;
+  final ValueChanged<bool> onToggle;
+  final Color? amountColor;
+
+  @override
+  Widget build(BuildContext context) {
+    final resolvedAmountColor = amountColor ?? AppColors.textDark;
+    final resolvedProgressColor = isEnabled ? tone : AppColors.disabledContent;
+    final radius = BorderRadius.circular(AppRadii.lg);
+
+    return AnimatedOpacity(
+      duration: const Duration(milliseconds: 160),
+      opacity: isEnabled ? 1 : 0.6,
+      child: Material(
+        color: Colors.white,
+        borderRadius: radius,
+        shadowColor: AppColors.cardShadow,
+        elevation: 2,
+        child: InkWell(
+          onTap: onTap,
+          borderRadius: radius,
+          child: Padding(
+            padding: const EdgeInsets.symmetric(
+              horizontal: AppSpacing.sm,
+              vertical: AppSpacing.sm,
+            ),
+            child: Row(
+              children: <Widget>[
+                _IconBadge(icon: icon, tone: tone, enabled: isEnabled),
+                const SizedBox(width: AppSpacing.sm),
+                Expanded(
+                  child: Column(
+                    crossAxisAlignment: CrossAxisAlignment.start,
+                    mainAxisSize: MainAxisSize.min,
+                    children: <Widget>[
+                      Text(
+                        title,
+                        maxLines: 1,
+                        overflow: TextOverflow.ellipsis,
+                        style: const TextStyle(
+                          color: AppColors.textDark,
+                          fontSize: 14,
+                          fontWeight: FontWeight.w800,
+                          height: 1.2,
+                        ),
+                      ),
+                      if (progressLabel != null) ...<Widget>[
+                        const SizedBox(height: 3),
+                        Text(
+                          progressLabel!,
+                          maxLines: 1,
+                          overflow: TextOverflow.ellipsis,
+                          style: const TextStyle(
+                            color: AppColors.textSecondary,
+                            fontSize: 11,
+                            fontWeight: FontWeight.w700,
+                            height: 1.2,
+                          ),
+                        ),
+                      ],
+                      const SizedBox(height: AppSpacing.xs),
+                      _ProgressBar(
+                          value: progress, color: resolvedProgressColor),
+                    ],
+                  ),
+                ),
+                const SizedBox(width: AppSpacing.sm),
+                Column(
+                  crossAxisAlignment: CrossAxisAlignment.end,
+                  mainAxisSize: MainAxisSize.min,
+                  children: <Widget>[
+                    Text(
+                      amount,
+                      maxLines: 1,
+                      overflow: TextOverflow.ellipsis,
+                      style: TextStyle(
+                        color: resolvedAmountColor,
+                        fontSize: 16,
+                        fontWeight: FontWeight.w900,
+                        height: 1,
+                        fontFeatures: const <FontFeature>[
+                          FontFeature.tabularFigures(),
+                        ],
+                      ),
+                    ),
+                    const SizedBox(height: AppSpacing.xs),
+                    AppToggleSwitch(
+                      value: isEnabled,
+                      activeColor: AppColors.primaryBlue,
+                      onChanged: onToggle,
+                    ),
+                  ],
+                ),
+              ],
+            ),
+          ),
+        ),
+      ),
+    );
+  }
+}
+
+class AddCategoryListCard extends StatelessWidget {
+  const AddCategoryListCard({
+    super.key,
+    required this.onTap,
+    required this.title,
+    required this.detail,
+  });
+
+  final VoidCallback onTap;
+  final String title;
+  final String detail;
+
+  @override
+  Widget build(BuildContext context) {
+    final radius = BorderRadius.circular(AppRadii.lg);
+    return Material(
+      color: Colors.white,
+      borderRadius: radius,
+      shadowColor: AppColors.cardShadow,
+      elevation: 2,
+      child: InkWell(
+        onTap: onTap,
+        borderRadius: radius,
+        child: Padding(
+          padding: const EdgeInsets.symmetric(
+            horizontal: AppSpacing.sm,
+            vertical: AppSpacing.sm,
+          ),
+          child: Row(
+            children: <Widget>[
+              Container(
+                width: 40,
+                height: 40,
+                decoration: BoxDecoration(
+                  color: AppColors.lightBlueBg,
+                  borderRadius: BorderRadius.circular(14),
+                ),
+                child: const Icon(
+                  Icons.add_rounded,
+                  color: AppColors.primaryBlue,
+                  size: 22,
+                ),
+              ),
+              const SizedBox(width: AppSpacing.sm),
+              Expanded(
+                child: Column(
+                  crossAxisAlignment: CrossAxisAlignment.start,
+                  mainAxisSize: MainAxisSize.min,
+                  children: <Widget>[
+                    Text(
+                      title,
+                      maxLines: 1,
+                      overflow: TextOverflow.ellipsis,
+                      style: const TextStyle(
+                        color: AppColors.textDark,
+                        fontSize: 15,
+                        fontWeight: FontWeight.w800,
+                      ),
+                    ),
+                    const SizedBox(height: 3),
+                    Text(
+                      detail,
+                      maxLines: 2,
+                      overflow: TextOverflow.ellipsis,
+                      style: const TextStyle(
+                        color: AppColors.textSecondary,
+                        fontSize: 11,
+                        fontWeight: FontWeight.w700,
+                        height: 1.3,
+                      ),
+                    ),
+                  ],
+                ),
+              ),
+              const SizedBox(width: AppSpacing.xs),
+              const Icon(
+                Icons.chevron_right_rounded,
+                color: AppColors.textMuted,
+                size: 20,
+              ),
+            ],
+          ),
+        ),
+      ),
+    );
+  }
+}
+
 class CategoryGridData {
   const CategoryGridData({
     required this.title,
diff --git a/lib/features/expense/presentation/screens/categories_screen.dart b/lib/features/expense/presentation/screens/categories_screen.dart
index e10fbf2..30b9930 100644
--- a/lib/features/expense/presentation/screens/categories_screen.dart
+++ b/lib/features/expense/presentation/screens/categories_screen.dart
@@ -3,13 +3,14 @@ import 'package:flutter_riverpod/flutter_riverpod.dart';
 import 'package:intl/intl.dart';
 
 import '../../../../core/theme/app_colors.dart';
-import '../../../../shared/widgets/app_page_header.dart';
+import '../../../../core/theme/app_tokens.dart';
 import '../../../../shared/widgets/app_tab_switcher.dart';
 import '../../data/models/account_model.dart';
 import '../../data/models/custom_category_model.dart';
 import '../../data/models/expense_model.dart';
 import '../provider/account_providers.dart';
 import '../provider/budget_providers.dart';
+import '../provider/budget_state.dart';
 import '../provider/expense_providers.dart';
 import '../provider/preferences_providers.dart';
 import '../widgets/account_editor_sheet.dart';
@@ -17,6 +18,7 @@ import '../widgets/account_icons.dart';
 import '../widgets/amount_visibility.dart';
 import '../widgets/category_editor_sheet.dart';
 import '../widgets/expense_category.dart';
+import 'categories/budget_popup.dart';
 import 'categories/categories_widgets.dart';
 
 enum _BoardMode { expenses, income, accounts }
@@ -31,7 +33,9 @@ class CategoriesScreen extends ConsumerStatefulWidget {
 class _CategoriesScreenState extends ConsumerState<CategoriesScreen>
     with SingleTickerProviderStateMixin {
   late final TabController _tabController;
+  late final TextEditingController _searchController;
   _BoardMode _mode = _BoardMode.expenses;
+  String _searchQuery = '';
 
   static const List<AppTabItem> _categoryTabs = <AppTabItem>[
     AppTabItem(label: 'Expense', icon: Icons.arrow_outward_rounded),
@@ -43,11 +47,22 @@ class _CategoriesScreenState extends ConsumerState<CategoriesScreen>
   void initState() {
     super.initState();
     _tabController = TabController(length: _categoryTabs.length, vsync: this);
+    _searchController = TextEditingController();
+    _searchController.addListener(() {
+      final q = _searchController.text;
+      if (q != _searchQuery) setState(() => _searchQuery = q);
+    });
     _tabController.addListener(() {
       final newIndex = _tabController.index;
       final newMode = _BoardMode.values[newIndex];
       if (_mode != newMode) {
-        setState(() => _mode = newMode);
+        // Update state (including _searchQuery) first so the searchController
+        // listener finds the query already empty and skips its own setState.
+        setState(() {
+          _mode = newMode;
+          _searchQuery = '';
+        });
+        _searchController.clear();
       }
     });
   }
@@ -55,15 +70,22 @@ class _CategoriesScreenState extends ConsumerState<CategoriesScreen>
   @override
   void dispose() {
     _tabController.dispose();
+    _searchController.dispose();
     super.dispose();
   }
 
   @override
   Widget build(BuildContext context) {
-    final stats = ref.watch(statsProvider);
+    // Month-aware providers
+    final selectedMonth = ref.watch(selectedMonthProvider);
+    final monthStats = ref.watch(monthlyStatsForMonthProvider);
+    final effectiveBudgets = ref.watch(effectiveMonthBudgetsProvider);
+    final totalBudget = ref.watch(monthTotalBudgetProvider);
+    final remainingBudget = ref.watch(monthRemainingBudgetProvider);
+
+    // Infrastructure providers
     final budgetState = ref.watch(budgetTargetsProvider);
     final accountState = ref.watch(accountListProvider);
-    final accountSummary = ref.watch(accountSummaryProvider);
     final privacyModeEnabled = ref.watch(privacyModeEnabledProvider);
     final currency = ref.watch(currencyFormatProvider);
     final disabledExpenseCategories =
@@ -76,35 +98,23 @@ class _CategoriesScreenState extends ConsumerState<CategoriesScreen>
     final customExpenseCategories =
         ref.watch(customExpenseCategoryListProvider);
     final customIncomeCategories = ref.watch(customIncomeCategoryListProvider);
-    final budgets = budgetState.value ?? defaultBudgetTargets;
     final accounts = accountState.value ?? const <AccountModel>[];
 
-    final summaryAmount = _summaryAmount(
-      mode: _mode,
-      currency: currency,
-      stats: stats,
-      accountSummary: accountSummary,
-      masked: privacyModeEnabled,
-    );
-    final summaryLabel = _summaryLabel(_mode);
+    final now = DateTime.now();
+    final canSetBudget = selectedMonth.year > now.year ||
+        (selectedMonth.year == now.year &&
+            selectedMonth.month >= now.month);
 
     return Column(
       crossAxisAlignment: CrossAxisAlignment.start,
       children: <Widget>[
-        AppPageHeader(
-          eyebrow: 'Categories',
-          title: summaryAmount,
-          subtitle: summaryLabel,
-          bottom: AppTabSwitcher(
-            tabs: _categoryTabs,
-            selected: _mode.index,
-            onChanged: (index) {
-              setState(() {
-                _mode = _BoardMode.values[index];
-              });
-              _tabController.animateTo(index);
-            },
-          ),
+        _buildHeader(
+          context: context,
+          selectedMonth: selectedMonth,
+          totalBudget: totalBudget,
+          remainingBudget: remainingBudget,
+          currency: currency,
+          masked: privacyModeEnabled,
         ),
         if ((_mode == _BoardMode.expenses && budgetState.isLoading) ||
             (_mode == _BoardMode.accounts && accountState.isLoading))
@@ -113,10 +123,10 @@ class _CategoriesScreenState extends ConsumerState<CategoriesScreen>
           child: TabBarView(
             controller: _tabController,
             children: _BoardMode.values.map((mode) {
-              final modeCards = _buildCards(
+              final allCards = _buildCards(
                 mode: mode,
-                stats: stats,
-                budgets: budgets,
+                stats: monthStats,
+                budgets: effectiveBudgets,
                 accounts: accounts,
                 disabledExpenseCategories: disabledExpenseCategories,
                 disabledIncomeCategories: disabledIncomeCategories,
@@ -126,11 +136,19 @@ class _CategoriesScreenState extends ConsumerState<CategoriesScreen>
                 customExpenseCategories: customExpenseCategories,
                 customIncomeCategories: customIncomeCategories,
               );
+              final filteredCards = _searchQuery.isEmpty
+                  ? allCards
+                  : allCards
+                      .where((c) => c.title
+                          .toLowerCase()
+                          .contains(_searchQuery.toLowerCase()))
+                      .toList(growable: false);
               return _buildModeScrollPane(
                 mode: mode,
-                cards: modeCards,
+                cards: filteredCards,
                 currency: currency,
                 privacyModeEnabled: privacyModeEnabled,
+                canSetBudget: canSetBudget,
               );
             }).toList(growable: false),
           ),
@@ -139,66 +157,253 @@ class _CategoriesScreenState extends ConsumerState<CategoriesScreen>
     );
   }
 
+  // ── header ─────────────────────────────────────────────────────────────────
+
+  Widget _buildHeader({
+    required BuildContext context,
+    required DateTime selectedMonth,
+    required double? totalBudget,
+    required double? remainingBudget,
+    required NumberFormat currency,
+    required bool masked,
+  }) {
+    final monthLabel = DateFormat('MMMM yyyy').format(selectedMonth);
+    final topPadding = MediaQuery.of(context).padding.top;
+
+    return Container(
+      width: double.infinity,
+      decoration: const BoxDecoration(
+        color: Colors.white,
+        boxShadow: <BoxShadow>[
+          BoxShadow(
+            color: AppColors.cardShadow,
+            blurRadius: 10,
+            offset: Offset(0, 3),
+          ),
+        ],
+      ),
+      child: Padding(
+        padding: EdgeInsets.fromLTRB(
+            AppSpacing.lg, topPadding + AppSpacing.md, AppSpacing.lg, 0),
+        child: Column(
+          crossAxisAlignment: CrossAxisAlignment.start,
+          children: <Widget>[
+            // ── Row 1: month navigation + budget summary ──────────────────
+            Row(
+              crossAxisAlignment: CrossAxisAlignment.center,
+              children: <Widget>[
+                _MonthNavButton(
+                  icon: Icons.chevron_left_rounded,
+                  onTap: _goToPreviousMonth,
+                ),
+                const SizedBox(width: AppSpacing.xs),
+                Text(
+                  monthLabel,
+                  style: const TextStyle(
+                    color: AppColors.textDark,
+                    fontSize: 17,
+                    fontWeight: FontWeight.w900,
+                  ),
+                ),
+                const SizedBox(width: AppSpacing.xs),
+                _MonthNavButton(
+                  icon: Icons.chevron_right_rounded,
+                  onTap: _goToNextMonth,
+                ),
+                const Spacer(),
+                if (totalBudget != null)
+                  Column(
+                    crossAxisAlignment: CrossAxisAlignment.end,
+                    mainAxisSize: MainAxisSize.min,
+                    children: <Widget>[
+                      Text(
+                        'Budget: ${maskAmount(currency.format(totalBudget), masked: masked)}',
+                        style: const TextStyle(
+                          color: AppColors.textDark,
+                          fontSize: 13,
+                          fontWeight: FontWeight.w800,
+                        ),
+                      ),
+                      if (remainingBudget != null) ...<Widget>[
+                        const SizedBox(height: 2),
+                        Text(
+                          remainingBudget >= 0
+                              ? 'Remaining: ${maskAmount(currency.format(remainingBudget), masked: masked)}'
+                              : 'Over by: ${maskAmount(currency.format(remainingBudget.abs()), masked: masked)}',
+                          style: TextStyle(
+                            color: remainingBudget >= 0
+                                ? AppColors.success
+                                : AppColors.danger,
+                            fontSize: 12,
+                            fontWeight: FontWeight.w700,
+                          ),
+                        ),
+                      ],
+                    ],
+                  ),
+              ],
+            ),
+            const SizedBox(height: AppSpacing.sm),
+
+            // ── Search bar ────────────────────────────────────────────────
+            TextField(
+              controller: _searchController,
+              decoration: InputDecoration(
+                hintText: 'Search ${_modeName(_mode)}...',
+                hintStyle: const TextStyle(
+                  color: AppColors.textMuted,
+                  fontSize: 14,
+                  fontWeight: FontWeight.w600,
+                ),
+                prefixIcon: const Icon(Icons.search_rounded,
+                    color: AppColors.textMuted, size: 20),
+                suffixIcon: _searchQuery.isNotEmpty
+                    ? IconButton(
+                        icon: const Icon(Icons.close_rounded,
+                            size: 18, color: AppColors.textMuted),
+                        onPressed: () {
+                          _searchController.clear();
+                          setState(() => _searchQuery = '');
+                        },
+                      )
+                    : null,
+                filled: true,
+                fillColor: AppColors.surfaceLight,
+                border: OutlineInputBorder(
+                  borderRadius: BorderRadius.circular(AppRadii.md),
+                  borderSide: BorderSide.none,
+                ),
+                contentPadding:
+                    const EdgeInsets.symmetric(horizontal: 16, vertical: 0),
+                isDense: true,
+              ),
+              style: const TextStyle(
+                fontSize: 14,
+                fontWeight: FontWeight.w600,
+                color: AppColors.textDark,
+              ),
+            ),
+            const SizedBox(height: AppSpacing.sm),
+
+            // ── Tab switcher ──────────────────────────────────────────────
+            AppTabSwitcher(
+              tabs: _categoryTabs,
+              selected: _mode.index,
+              onChanged: (index) {
+                // Update mode + query in one setState, then clear the
+                // controller so its listener finds the query already empty.
+                setState(() {
+                  _mode = _BoardMode.values[index];
+                  _searchQuery = '';
+                });
+                _searchController.clear();
+                _tabController.animateTo(index);
+              },
+            ),
+            const SizedBox(height: AppSpacing.xs),
+          ],
+        ),
+      ),
+    );
+  }
+
+  // ── scroll pane ────────────────────────────────────────────────────────────
+
   Widget _buildModeScrollPane({
     required _BoardMode mode,
     required List<CategoryGridData> cards,
     required NumberFormat currency,
     required bool privacyModeEnabled,
+    required bool canSetBudget,
   }) {
-    return SingleChildScrollView(
-      padding: const EdgeInsets.fromLTRB(16, 16, 16, 124),
-      child: LayoutBuilder(
-        builder: (context, constraints) {
-          final width = constraints.maxWidth;
-          final crossAxisCount = width >= 900
-              ? 4
-              : width >= 640
-                  ? 3
-                  : 2;
-          final ratio = width >= 900
-              ? 1.35
-              : width >= 640
-                  ? 1.28
-                  : 1.22;
-
-          return GridView.builder(
-            itemCount: cards.length + 1,
-            shrinkWrap: true,
-            physics: const NeverScrollableScrollPhysics(),
-            gridDelegate: SliverGridDelegateWithFixedCrossAxisCount(
-              crossAxisCount: crossAxisCount,
-              mainAxisSpacing: 12,
-              crossAxisSpacing: 12,
-              childAspectRatio: ratio,
+    // index 0 = action bar, 1..N = category cards
+    return ListView.separated(
+      padding: const EdgeInsets.fromLTRB(16, 12, 16, 130),
+      itemCount: cards.length + 1,
+      separatorBuilder: (_, __) => const SizedBox(height: 12),
+      itemBuilder: (context, index) {
+        if (index == 0) {
+          return _buildActionBar(mode, canSetBudget);
+        }
+        final entry = cards[index - 1];
+        return CategoryListCard(
+          title: entry.title,
+          icon: entry.icon,
+          tone: entry.tone,
+          amount: _displayAmount(
+              entry.amount, entry.amountColor, currency,
+              masked: privacyModeEnabled),
+          progressLabel: entry.progressLabel,
+          progress: entry.progress,
+          isEnabled: entry.isEnabled,
+          onTap: entry.onTap,
+          onToggle: entry.onToggle,
+          amountColor: entry.amountColor,
+        );
+      },
+    );
+  }
+
+  // ── action bar ─────────────────────────────────────────────────────────────
+
+  Widget _buildActionBar(_BoardMode mode, bool canSetBudget) {
+    return Row(
+      children: <Widget>[
+        Expanded(
+          child: _ActionButton(
+            icon: Icons.add_rounded,
+            label: _actionTitle(mode),
+            onTap: () => _handlePrimaryActionTapFor(mode),
+          ),
+        ),
+        if (canSetBudget) ...<Widget>[
+          const SizedBox(width: 10),
+          Expanded(
+            child: _ActionButton(
+              icon: Icons.savings_outlined,
+              label: 'Set Budget',
+              accentColor: AppColors.success,
+              onTap: _openSetBudgetPopup,
             ),
-            itemBuilder: (context, index) {
-              if (index == cards.length) {
-                return AddCategoryCard(
-                  onTap: () => _handlePrimaryActionTapFor(mode),
-                  title: _actionTitle(mode),
-                  detail: _actionDetail(mode),
-                );
-              }
-
-              final entry = cards[index];
-              return CategoryGridCard(
-                title: entry.title,
-                icon: entry.icon,
-                tone: entry.tone,
-                amount: _displayAmount(
-                    entry.amount, entry.amountColor, currency,
-                    masked: privacyModeEnabled),
-                progressLabel: entry.progressLabel,
-                progress: entry.progress,
-                isEnabled: entry.isEnabled,
-                onTap: entry.onTap,
-                onToggle: entry.onToggle,
-                amountColor: entry.amountColor,
-              );
-            },
-          );
-        },
-      ),
+          ),
+        ],
+      ],
+    );
+  }
+
+  // ── month navigation ───────────────────────────────────────────────────────
+
+  void _goToPreviousMonth() {
+    final current = ref.read(selectedMonthProvider);
+    ref.read(selectedMonthProvider.notifier).state =
+        DateTime(current.year, current.month - 1);
+  }
+
+  void _goToNextMonth() {
+    final current = ref.read(selectedMonthProvider);
+    ref.read(selectedMonthProvider.notifier).state =
+        DateTime(current.year, current.month + 1);
+  }
+
+  // ── set budget popup ───────────────────────────────────────────────────────
+
+  Future<void> _openSetBudgetPopup() async {
+    final selectedMonth = ref.read(selectedMonthProvider);
+    final currentTotal = ref.read(monthTotalBudgetProvider);
+    await showSetBudgetPopup(
+      context,
+      selectedMonth: selectedMonth,
+      currencySymbol: ref.read(currencySymbolProvider),
+      currentTotal: currentTotal,
+      onManual: (amount) =>
+          ref.read(monthBudgetControllerProvider).saveMonthTotal(
+                selectedMonth,
+                amount,
+              ),
+      onCopyPrevious: () =>
+          ref.read(monthBudgetControllerProvider).copyFromPreviousMonth(
+                selectedMonth,
+              ),
     );
   }
 
@@ -361,36 +566,14 @@ class _CategoriesScreenState extends ConsumerState<CategoriesScreen>
     return maskAmount(currency.format(amount), masked: masked);
   }
 
-  String _summaryAmount({
-    required _BoardMode mode,
-    required NumberFormat currency,
-    required ExpenseStats stats,
-    required AccountSummary accountSummary,
-    required bool masked,
-  }) {
+  String _modeName(_BoardMode mode) {
     switch (mode) {
       case _BoardMode.expenses:
-        return maskAmount(currency.format(stats.monthTotal), masked: masked);
+        return 'expense categories';
       case _BoardMode.income:
-        return maskAmount(currency.format(stats.monthIncomeTotal),
-            masked: masked);
+        return 'income categories';
       case _BoardMode.accounts:
-        final balance = accountSummary.totalBalance;
-        if (balance < 0) {
-          return '-${maskAmount(currency.format(balance.abs()), masked: masked)}';
-        }
-        return maskAmount(currency.format(balance), masked: masked);
-    }
-  }
-
-  String _summaryLabel(_BoardMode mode) {
-    switch (mode) {
-      case _BoardMode.expenses:
-        return 'Expenses this month';
-      case _BoardMode.income:
-        return 'Income this month';
-      case _BoardMode.accounts:
-        return 'Tracked account balance';
+        return 'accounts';
     }
   }
 
@@ -405,17 +588,6 @@ class _CategoriesScreenState extends ConsumerState<CategoriesScreen>
     }
   }
 
-  String _actionDetail(_BoardMode mode) {
-    switch (mode) {
-      case _BoardMode.expenses:
-        return 'Create your own expense category.';
-      case _BoardMode.income:
-        return 'Create your own income category.';
-      case _BoardMode.accounts:
-        return 'Create a new account entry.';
-    }
-  }
-
   void _handlePrimaryActionTapFor(_BoardMode mode) {
     switch (mode) {
       case _BoardMode.expenses:
@@ -695,3 +867,78 @@ class _CategoriesScreenState extends ConsumerState<CategoriesScreen>
         .showSnackBar(SnackBar(content: Text(message)));
   }
 }
+
+// ── private widgets ───────────────────────────────────────────────────────────
+
+class _MonthNavButton extends StatelessWidget {
+  const _MonthNavButton({required this.icon, required this.onTap});
+
+  final IconData icon;
+  final VoidCallback onTap;
+
+  @override
+  Widget build(BuildContext context) {
+    return Material(
+      color: AppColors.lightBlueBg,
+      borderRadius: BorderRadius.circular(12),
+      child: InkWell(
+        onTap: onTap,
+        borderRadius: BorderRadius.circular(12),
+        child: Padding(
+          padding: const EdgeInsets.all(6),
+          child: Icon(icon, color: AppColors.primaryBlue, size: 20),
+        ),
+      ),
+    );
+  }
+}
+
+class _ActionButton extends StatelessWidget {
+  const _ActionButton({
+    required this.icon,
+    required this.label,
+    required this.onTap,
+    this.accentColor = AppColors.primaryBlue,
+  });
+
+  final IconData icon;
+  final String label;
+  final VoidCallback onTap;
+  final Color accentColor;
+
+  @override
+  Widget build(BuildContext context) {
+    final radius = BorderRadius.circular(AppRadii.md);
+    return Material(
+      color: accentColor.withValues(alpha: 0.1),
+      borderRadius: radius,
+      child: InkWell(
+        onTap: onTap,
+        borderRadius: radius,
+        child: Padding(
+          padding: const EdgeInsets.symmetric(
+              horizontal: AppSpacing.sm, vertical: AppSpacing.xs),
+          child: Row(
+            mainAxisAlignment: MainAxisAlignment.center,
+            children: <Widget>[
+              Icon(icon, size: 18, color: accentColor),
+              const SizedBox(width: 6),
+              Flexible(
+                child: Text(
+                  label,
+                  maxLines: 1,
+                  overflow: TextOverflow.ellipsis,
+                  style: TextStyle(
+                    color: accentColor,
+                    fontSize: 13,
+                    fontWeight: FontWeight.w800,
+                  ),
+                ),
+              ),
+            ],
+          ),
+        ),
+      ),
+    );
+  }
+}
diff --git a/lib/features/expense/presentation/screens/upi_scanner_screen.dart b/lib/features/expense/presentation/screens/upi_scanner_screen.dart
index b32d7ee..b6200b2 100644
--- a/lib/features/expense/presentation/screens/upi_scanner_screen.dart
+++ b/lib/features/expense/presentation/screens/upi_scanner_screen.dart
@@ -5,11 +5,12 @@ import 'package:mobile_scanner/mobile_scanner.dart';
 import '../../../../core/theme/app_colors.dart';
 import '../../../../routes/app_routes.dart';
 
-/// A QR scanner specialised for the "Pay Directly" flow.
+/// A QR scanner specialised for the "Pay via UPI" flow.
 ///
-/// Detects a UPI payment QR, extracts the full URI, and opens
-/// [AddExpenseScreen] in pay-mode so the user can fill in the amount,
-/// launch their UPI app, and then save the transaction.
+/// Detects a UPI payment QR, extracts the payee VPA and merchant name, and
+/// opens [AddExpenseScreen] in pay-mode.  The amount the user enters in
+/// XPensa is shown as a hint; the user manually enters it in their UPI app
+/// to avoid the fraud flags that externally pre-filled payment intents trigger.
 class UpiScannerScreen extends StatefulWidget {
   const UpiScannerScreen({super.key});
 
@@ -47,9 +48,28 @@ class _UpiScannerScreenState extends State<UpiScannerScreen> {
       return;
     }
 
+    final Uri uri;
+    try {
+      uri = Uri.parse(rawValue);
+    } on FormatException {
+      ScaffoldMessenger.of(context).showSnackBar(
+        const SnackBar(content: Text('Could not read QR data. Try again.')),
+      );
+      return;
+    }
+
+    final pa = uri.queryParameters['pa'];
+    if (pa == null || pa.trim().isEmpty) {
+      ScaffoldMessenger.of(context).showSnackBar(
+        const SnackBar(
+          content: Text('Invalid QR: payee UPI ID is missing. Try again.'),
+        ),
+      );
+      return;
+    }
+
     setState(() => _isProcessed = true);
 
-    final uri = Uri.parse(rawValue);
     final am = uri.queryParameters['am'];
     final pn = uri.queryParameters['pn'];
     final tn = uri.queryParameters['tn'];
@@ -112,7 +132,7 @@ class _UpiScannerScreenState extends State<UpiScannerScreen> {
   Widget build(BuildContext context) {
     return Scaffold(
       appBar: AppBar(
-        title: const Text('Scan UPI QR'),
+        title: const Text('Pay via UPI'),
         backgroundColor: AppColors.primaryBlue,
         foregroundColor: Colors.white,
       ),
@@ -150,7 +170,7 @@ class _UpiScannerScreenState extends State<UpiScannerScreen> {
                         borderRadius: BorderRadius.circular(20),
                       ),
                       child: const Text(
-                        'Point camera at a UPI payment QR',
+                        'Scan merchant UPI QR to pay',
                         style: TextStyle(
                           color: Colors.white,
                           fontWeight: FontWeight.bold,
diff --git a/lib/features/expense/presentation/widgets/power_pill_menu.dart b/lib/features/expense/presentation/widgets/power_pill_menu.dart
index b6cc8fd..6db2936 100644
--- a/lib/features/expense/presentation/widgets/power_pill_menu.dart
+++ b/lib/features/expense/presentation/widgets/power_pill_menu.dart
@@ -10,12 +10,8 @@ import '../../../../shared/widgets/app_toggle_switch.dart';
 /// An expandable power FAB.
 ///
 /// Shows a circular `+` button. When tapped the button rotates 135° (making it
-/// look like ×) and five action pills animate up above it:
-///   Quick Add · Pay Directly · Scanner · Voice · SMS
-///
-/// The SMS pill has a split interaction:
-///   - Tapping the label / icon area opens the SMS settings sheet.
-///   - The inline toggle switch toggles SMS parsing on/off directly.
+/// look like ×) and action pills animate up above it:
+///   Quick Add · Voice
 ///
 /// Use [PowerFabState] via a [GlobalKey] to imperatively [close] the menu
 /// (e.g. from a barrier tap in the parent).
@@ -117,43 +113,13 @@ class PowerFabState extends State<PowerFab>
         if (_open) ...<Widget>[
           _AnimatedPill(
             animation: _ctrl,
-            staggerStart: 0.4,
-            icon: Icons.sms_outlined,
-            label: 'SMS',
-            infoText: 'Reads transaction SMS and logs expenses automatically',
-            onTap: () => _closeAndRun(widget.onSms),
-            trailingToggleValue: widget.smsParsingEnabled,
-            onTrailingToggle: widget.onSmsToggle,
-          ),
-          const SizedBox(height: 8),
-          _AnimatedPill(
-            animation: _ctrl,
-            staggerStart: 0.3,
+            staggerStart: 0.1,
             icon: Icons.mic_none_rounded,
             label: 'Voice',
             infoText: 'Speak an expense aloud — parsed and saved for you',
             onTap: () => _closeAndRun(widget.onVoice),
           ),
           const SizedBox(height: 8),
-          _AnimatedPill(
-            animation: _ctrl,
-            staggerStart: 0.2,
-            icon: Icons.document_scanner_outlined,
-            label: 'Scan & Log',
-            infoText:
-                'Scan a bill barcode/QR or photograph a product — XPens fills in the details for you',
-            onTap: () => _closeAndRun(widget.onScanner),
-          ),
-          const SizedBox(height: 8),
-          _AnimatedPill(
-            animation: _ctrl,
-            staggerStart: 0.1,
-            icon: Icons.currency_rupee_rounded,
-            label: 'Pay Directly',
-            infoText: 'Pay via UPI QR code and log the transaction instantly',
-            onTap: () => _closeAndRun(widget.onPayDirectly),
-          ),
-          const SizedBox(height: 8),
           _AnimatedPill(
             animation: _ctrl,
             staggerStart: 0.0,
@@ -291,7 +257,7 @@ class _AnimatedPillState extends State<_AnimatedPill> {
         mainAxisSize: MainAxisSize.min,
         crossAxisAlignment: CrossAxisAlignment.end,
         children: <Widget>[
-          // ── Pill row ────────────────────────────────────────────────────
+          // ── Pill row ──────────────────────────────────────────────────
           Material(
             color: Colors.transparent,
             child: InkWell(
@@ -303,7 +269,7 @@ class _AnimatedPillState extends State<_AnimatedPill> {
                   : null,
               borderRadius: BorderRadius.circular(28),
               child: Container(
-                padding: EdgeInsets.only(
+                padding: const EdgeInsets.only(
                   left: 20,
                   right: 12,
                   top: 14,
@@ -344,7 +310,8 @@ class _AnimatedPillState extends State<_AnimatedPill> {
                         color: Colors.white.withValues(alpha: 0.25),
                       ),
                       const SizedBox(width: 8),
-                      // GestureDetector absorbs taps so they don't bubble to InkWell
+                      // GestureDetector absorbs taps so they don't bubble
+                      // to InkWell
                       GestureDetector(
                         behavior: HitTestBehavior.opaque,
                         onTap: () {
@@ -359,7 +326,7 @@ class _AnimatedPillState extends State<_AnimatedPill> {
                         ),
                       ),
                     ],
-                    // ── Info icon ──────────────────────────────────────────
+                    // ── Info icon ────────────────────────────────────────
                     const SizedBox(width: 10),
                     Container(
                       width: 1,
@@ -392,7 +359,7 @@ class _AnimatedPillState extends State<_AnimatedPill> {
             ),
           ),
 
-          // ── Info bar ────────────────────────────────────────────────────
+          // ── Info bar ────────────────────────────────────────────────
           AnimatedSwitcher(
             duration: const Duration(milliseconds: 180),
             transitionBuilder: (child, anim) => FadeTransition(
@@ -404,7 +371,10 @@ class _AnimatedPillState extends State<_AnimatedPill> {
               ),
             ),
             child: _showInfo
-                ? _InfoBar(key: const ValueKey('info'), text: widget.infoText)
+                ? _InfoBar(
+                    key: const ValueKey('info'),
+                    text: widget.infoText,
+                  )
                 : const SizedBox.shrink(key: ValueKey('empty')),
           ),
         ],
diff --git a/lib/features/sms_parser/data/sms_transaction.dart b/lib/features/sms_parser/data/sms_transaction.dart
index 05f5b1e..750e6b0 100644
--- a/lib/features/sms_parser/data/sms_transaction.dart
+++ b/lib/features/sms_parser/data/sms_transaction.dart
@@ -11,6 +11,7 @@ class SmsTransaction {
     required this.rawMessage,
     required this.senderAddress,
     required this.confidence,
+    this.suggestedCategory,
   });
 
   /// Stable identifier (typically a hash of sender + body + timestamp).
@@ -37,4 +38,8 @@ class SmsTransaction {
   /// Parser confidence score in [0, 1]. Values below [SmsParserEngine.kMinConfidence]
   /// are considered low-confidence and require manual edit.
   final double confidence;
+
+  /// Expense category inferred from message content (e.g. "Food & Dining").
+  /// Null if no category could be reliably inferred.
+  final String? suggestedCategory;
 }
diff --git a/lib/features/sms_parser/domain/sms_parser_engine.dart b/lib/features/sms_parser/domain/sms_parser_engine.dart
index b936f80..dd0dd8f 100644
--- a/lib/features/sms_parser/domain/sms_parser_engine.dart
+++ b/lib/features/sms_parser/domain/sms_parser_engine.dart
@@ -12,7 +12,8 @@ import '../data/sms_transaction.dart';
 ///  2. Detect transaction direction (credit/income vs debit/expense).
 ///  3. Extract date/time.
 ///  4. Build a notes string from ref IDs, UPI IDs, merchant names, etc.
-///  5. Compute a confidence score.
+///  5. Infer an expense category from merchant/sender keywords.
+///  6. Compute a confidence score.
 ///
 /// A result with [confidence] < [kMinConfidence] should be treated as
 /// low-confidence and shown to the user for manual review rather than being
@@ -33,7 +34,9 @@ abstract final class SmsParserEngine {
         upper.contains('BANK') ||
         upper.contains('FINANCE') ||
         upper.contains('PAY') ||
-        upper.contains('UPI')) { return true; }
+        upper.contains('UPI')) {
+      return true;
+    }
     return false;
   }
 
@@ -66,7 +69,10 @@ abstract final class SmsParserEngine {
     // ── 4. Notes ──────────────────────────────────────────────────────────
     final notes = _buildNotes(body, senderAddress);
 
-    // ── 5. Confidence ─────────────────────────────────────────────────────
+    // ── 5. Category inference ─────────────────────────────────────────────
+    final suggestedCategory = inferCategory(body, senderAddress);
+
+    // ── 6. Confidence ─────────────────────────────────────────────────────
     final confidence = _computeConfidence(
       body: lower,
       amount: amount,
@@ -75,7 +81,7 @@ abstract final class SmsParserEngine {
       receivedAt: receivedAt,
     );
 
-    // ── 6. Stable ID ──────────────────────────────────────────────────────
+    // ── 7. Stable ID ──────────────────────────────────────────────────────
     final id = _stableId(senderAddress, body, receivedAt);
 
     return SmsTransaction(
@@ -87,6 +93,7 @@ abstract final class SmsParserEngine {
       rawMessage: body,
       senderAddress: senderAddress,
       confidence: confidence,
+      suggestedCategory: suggestedCategory,
     );
   }
 
@@ -100,6 +107,9 @@ abstract final class SmsParserEngine {
     'deposited',
     'refund',
     'cashback',
+    'reversed',
+    'transfer received',
+    'money received',
   ];
 
   static const List<String> _kDebitKeywords = <String>[
@@ -113,6 +123,15 @@ abstract final class SmsParserEngine {
     'purchase',
     'txn',
     'transaction',
+    'transferred',
+    'transfer',
+    'charged',
+    'neft',
+    'imps',
+    'rtgs',
+    'emi',
+    'mandate',
+    'bill payment',
   ];
 
   // Matches: ₹1,234.56  |  Rs.1234  |  Rs 1234  |  INR 1234  |  1234 INR
@@ -199,6 +218,12 @@ abstract final class SmsParserEngine {
     caseSensitive: false,
   );
 
+  // UTR is always a 12-digit numeric reference used by UPI/NEFT/IMPS
+  static final RegExp _kUtrPattern = RegExp(
+    r'(?:UTR|UPI\s*Ref(?:\s*No)?|Transaction\s*ID|Txn\s*ID)\s*:?\s*([A-Z0-9]{10,22})',
+    caseSensitive: false,
+  );
+
   static final RegExp _kUpiPattern = RegExp(
     r'(?:UPI(?:\s*ID)?:?\s*)([a-zA-Z0-9._\-]+@[a-zA-Z0-9._\-]+)',
     caseSensitive: false,
@@ -210,15 +235,21 @@ abstract final class SmsParserEngine {
   );
 
   static final RegExp _kMerchantPattern = RegExp(
-    r'(?:to|at|from|merchant|shop|store|vendor|using)\s+([A-Z][A-Za-z0-9 &\.\-]{2,30})',
+    r'(?:to|at|from|merchant|shop|store|vendor|using|towards|for)\s+([A-Z][A-Za-z0-9 &\.\-]{2,30})',
     caseSensitive: false,
   );
 
   static String _buildNotes(String body, String sender) {
     final parts = <String>[];
 
-    final refMatch = _kRefPattern.firstMatch(body);
-    if (refMatch != null) parts.add('Ref: ${refMatch.group(1)}');
+    // Prefer UTR over generic ref — UTR is the canonical UPI transaction ID
+    final utrMatch = _kUtrPattern.firstMatch(body);
+    if (utrMatch != null) {
+      parts.add('UTR: ${utrMatch.group(1)}');
+    } else {
+      final refMatch = _kRefPattern.firstMatch(body);
+      if (refMatch != null) parts.add('Ref: ${refMatch.group(1)}');
+    }
 
     final upiMatch =
         _kUpiPattern.firstMatch(body) ?? _kVpaPattern.firstMatch(body);
@@ -241,6 +272,66 @@ abstract final class SmsParserEngine {
     return parts.join(' · ');
   }
 
+  // ── Category inference ────────────────────────────────────────────────────
+
+  /// Infer a likely expense category from message body and sender ID.
+  ///
+  /// Returns a category name string (matching the built-in expense category
+  /// names) or `null` if no strong match is found.
+  static String? inferCategory(String body, String sender) {
+    final lower = body.toLowerCase();
+    final senderLower = sender.toLowerCase();
+
+    if (_containsAny(lower, const <String>[
+      'swiggy', 'zomato', 'dunzo', 'blinkit', 'restaurant', 'cafe',
+      'food', 'dine', 'hotel', 'domino', 'pizza', 'biryani',
+    ])) return 'Food & Dining';
+
+    if (_containsAny(lower, const <String>[
+      'ola', 'uber', 'rapido', 'redbus', 'irctc', 'petrol', 'fuel',
+      'diesel', 'metro', 'auto', 'cab', 'bus ticket', 'train',
+    ])) return 'Transport';
+
+    if (_containsAny(lower, const <String>[
+      'amazon', 'flipkart', 'myntra', 'ajio', 'meesho', 'nykaa',
+      'shopping', 'mall', 'retail',
+    ])) return 'Shopping';
+
+    // Combine message body + sender once to check both with a single pass.
+    final combined = lower + senderLower;
+    if (_containsAny(combined, const <String>[
+      'electricity', 'water bill', 'gas bill', 'broadband', 'wifi',
+      'jio', 'airtel', 'vodafone',
+      'vi ', // trailing space avoids false-positive on words containing 'vi'
+      'bsnl', 'recharge', 'dth',
+      'tata sky', 'dish tv', 'bill pay', 'bill payment',
+    ])) return 'Bills & Utilities';
+
+    if (_containsAny(lower, const <String>[
+      'pharmacy', 'medical', 'hospital', 'clinic', 'doctor', 'apollo',
+      'medplus', 'netmeds', 'pharmeasy', 'health', 'medicine',
+    ])) return 'Healthcare';
+
+    if (_containsAny(lower, const <String>[
+      'netflix', 'hotstar', 'prime video', 'amazon prime', 'spotify',
+      'youtube', 'game', 'movie', 'theatre', 'multiplex', 'pvr', 'inox',
+    ])) return 'Entertainment';
+
+    if (_containsAny(lower, const <String>[
+      'school', 'college', 'university', 'tuition', 'coaching',
+      'education', 'course', 'udemy', 'coursera',
+    ])) return 'Education';
+
+    if (_containsAny(lower, const <String>[
+      'salary', 'payroll', 'stipend', 'wages',
+    ])) return 'Salary';
+
+    return null;
+  }
+
+  static bool _containsAny(String text, List<String> keywords) =>
+      keywords.any(text.contains);
+
   // ── Confidence scoring ────────────────────────────────────────────────────
 
   static double _computeConfidence({
@@ -264,8 +355,10 @@ abstract final class SmsParserEngine {
     if (_kDatePattern.hasMatch(body)) score += 0.15;
     if (_kTimePattern.hasMatch(body)) score += 0.05;
 
-    // Ref ID or UPI found
-    if (_kRefPattern.hasMatch(body) || _kUpiPattern.hasMatch(body)) {
+    // UTR, Ref ID, or UPI ID found — strong signal of a real bank transaction
+    if (_kUtrPattern.hasMatch(body) ||
+        _kRefPattern.hasMatch(body) ||
+        _kUpiPattern.hasMatch(body)) {
       score += 0.1;
     }
 
diff --git a/lib/features/sms_parser/presentation/provider/sms_providers.dart b/lib/features/sms_parser/presentation/provider/sms_providers.dart
index 64628f2..9881ed0 100644
--- a/lib/features/sms_parser/presentation/provider/sms_providers.dart
+++ b/lib/features/sms_parser/presentation/provider/sms_providers.dart
@@ -128,7 +128,10 @@ class SmsQueueController {
     final defaultAccountId = prefs?.smsDefaultAccountId ?? '';
     final defaultCategory = prefs?.smsDefaultCategory ?? '';
 
-    final category = defaultCategory.isNotEmpty ? defaultCategory : 'Other';
+    // Prefer user-configured default → parser-inferred category → fallback
+    final category = defaultCategory.isNotEmpty
+        ? defaultCategory
+        : (tx.suggestedCategory ?? 'Other');
     final accountId = defaultAccountId.isNotEmpty ? defaultAccountId : null;
 
     await _ref.read(expenseControllerProvider).addExpense(
@@ -179,9 +182,13 @@ class SmsQueueController {
     final prefs = _ref.read(appPreferencesProvider).value;
     final defaultAccountId = prefs?.smsDefaultAccountId ?? '';
     final defaultCategory = prefs?.smsDefaultCategory ?? '';
+    // Prefer user-configured default → parser-inferred category → fallback
+    final category = defaultCategory.isNotEmpty
+        ? defaultCategory
+        : (tx.suggestedCategory ?? 'Other');
     return (
       amount: tx.amount,
-      category: defaultCategory.isNotEmpty ? defaultCategory : 'Other',
+      category: category,
       date: tx.timestamp,
       note: tx.notes,
       accountId: defaultAccountId.isNotEmpty ? defaultAccountId : null,
diff --git a/lib/routes/app_routes.dart b/lib/routes/app_routes.dart
index 06e0874..fa80a86 100644
--- a/lib/routes/app_routes.dart
+++ b/lib/routes/app_routes.dart
@@ -112,9 +112,9 @@ abstract final class AppRoutes {
     );
   }
 
-  // ── UPI Scanner (Pay Directly) ─────────────────────────────────────────────
+  // ── UPI Scanner (Pay via UPI) ──────────────────────────────────────────────
 
-  /// Push the UPI-payment QR scanner for the "Pay Directly" flow.
+  /// Push the UPI QR scanner for the "Pay via UPI" flow.
   static Future<void> pushUpiScanner(BuildContext context) {
     return Navigator.of(context).push<void>(
       MaterialPageRoute<void>(builder: (_) => const UpiScannerScreen()),
@@ -123,8 +123,10 @@ abstract final class AppRoutes {
 
   /// Replace the current route with [AddExpenseScreen] in pay-mode.
   ///
-  /// Used by [UpiScannerScreen] after a successful scan so that the user returns
-  /// directly to the expense form (pre-filled, pay mode) rather than the scanner.
+  /// Used by [UpiScannerScreen] after a successful scan.  The screen shows an
+  /// "Open UPI App" button that hands the user off to their preferred payment
+  /// app with only the payee VPA — no pre-filled amount that could trigger
+  /// fraud detection in GPay / PhonePe / Paytm.
   static void replaceWithPayExpense(
     BuildContext context, {
     required String payUpiUri,