Table of Contents
- Introduction
- Key Changes in Income Tax Rules
- UPI Rule Changes
- Credit Card Rule Updates
- Unified Pension Scheme (UPS) Implementation
- GST Rule Modifications
- Bank Minimum Balance Updates
- Changes in Savings and FD Interest Rates
- PAN-Aadhaar Linking Requirements
- Stricter Rules for Demat and Mutual Fund Accounts
- GST Rule Changes in the New Financial Year
- LPG Gas Cylinder Price Revisions
- FD TDS Benefits for Senior Citizens
- TDS/TCS Limit Revisions
- TDS on Partner’s Remuneration (Section 194T)
- Removal of TCS on Sale of Goods
- Removal of Sections 206AB & 206CCA
- Multiple Choice Questions (MCQs)
- Conclusion
Introduction
From April 1, 2025, several key changes related to personal finance and taxation will come into effect with the start of the new financial year. These changes will impact taxpayers, credit card users, and the general public significantly. In this post, we will discuss these key changes in detail, covering income tax updates, UPI rules, credit card modifications, and more.
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1. Key Changes in Income Tax Rules
The government has introduced several key changes in the income tax structure effective from April 1, 2025:
- Individuals earning up to ₹12 lakh annually will be exempt from paying income tax.
- Salaried individuals will receive a standard deduction of ₹75,000, making up to ₹12.75 lakh salary tax-free under the new tax regime.
- This change aims to increase disposable income and boost savings among taxpayers, especially those in the middle-income group.
- With the new tax regime, taxpayers are encouraged to explore the benefits and ensure they meet compliance requirements.
For more details on tax regulations, visit the official Income Tax website.
2. UPI Rule Changes
Inactive UPI numbers will no longer work from April 1, 2025. If your mobile number linked to UPI has been inactive for a long time, update it with your bank before the deadline to retain UPI services. This measure aims to enhance security and ensure that only active users have access to digital payment services.
3. Credit Card Rule Updates
Several credit card providers, including SBI and Axis Bank, are revising their reward point structures:
- SBI SimplyCLICK and Air India SBI Platinum Credit Cards will undergo changes.
- Axis Bank Vistara Credit Card will also see updates after the merger with Air India.
- These key changes could impact users who frequently rely on reward points for discounts and benefits.
4. Unified Pension Scheme (UPS) Implementation
The Unified Pension Scheme (UPS) will replace the old pension system, offering a pension equivalent to 50% of the average basic salary of the last 12 months for those who have served for at least 25 years. The UPS is designed to provide better financial security to central government employees and reduce uncertainties related to post-retirement benefits.
5. GST Rule Modifications
The GST portal will introduce mandatory multi-factor authentication (MFA) for enhanced security. Moreover, E-Way Bills can only be generated for documents not older than 180 days. This update is expected to streamline compliance and reduce fraud risks.
6. Bank Minimum Balance Updates
Major banks like SBI, PNB, and Canara Bank will update their minimum balance requirements. Failing to maintain the required balance will lead to penalties from April 1, 2025. Customers are advised to check their bank’s guidelines to avoid unnecessary charges.
7. Changes in Savings and FD Interest Rates
From April 1, 2025, several banks, including SBI, HDFC Bank, and Indian Bank, will revise their savings account and FD interest rates. Check your bank’s website for the latest rates and consider how these key changes might impact your savings strategy.
8. PAN-Aadhaar Linking Requirements
If your PAN-Aadhaar is not linked by April 1, 2025, you will not receive dividends on stocks, and TDS on capital gains will increase. No credit will be available in Form 26AS. To avoid disruptions, link your PAN and Aadhaar as soon as possible.
9. Stricter Rules for Demat and Mutual Fund Accounts
SEBI has tightened rules regarding KYC and nominee details. Failing to update these could result in your demat account being frozen. Reactivation is possible after completing the update.
10. GST Rule Changes in the New Financial Year
The new GST rule introduces the Input Service Distributor (ISD) system to ensure proper tax revenue distribution among states. This change will help businesses manage their tax liabilities more effectively and reduce compliance challenges.
11. LPG Gas Cylinder Price Revisions key changes
LPG cylinder prices will be revised monthly based on international oil prices and the dollar-rupee exchange rate. Stay updated on these changes to manage your household budget effectively.
12. FD TDS Benefits for Senior Citizens key changes
Senior citizens earning up to ₹1 lakh in interest from FD and RD will not face TDS deductions, doubling the previous limit of ₹50,000. For others, the limit has been increased from ₹40,000 to ₹50,000.
13. TDS/TCS Limit Revisions
The threshold limits for TDS and TCS under certain sections have been increased, reducing compliance burdens for smaller transactions and promoting smoother financial management.
14. TDS on Partner’s Remuneration (Section 194T)
Section 194T mandates a 10% TDS deduction on payments exceeding ₹20,000 made to partners by partnership firms and LLPs, covering commissions, salaries, and bonuses.
15. Removal of TCS on Sale of Goods
The removal of Section 206C(1H) simplifies compliance by eliminating the requirement for TCS on the sale of goods exceeding ₹50 lakh.
16. Removal of Sections 206AB & 206CCA
These sections, which imposed higher TDS and TCS rates for non-filers, have been abolished, simplifying compliance and reducing the burden on businesses.
17. Multiple Choice Questions (MCQs)
- What is the new standard deduction for salaried individuals?
- A) ₹50,000
- B) ₹75,000
- C) ₹1 lakh
- D) ₹1.25 lakh Answer: B) ₹75,000
- What is the new interest exemption limit for senior citizens on FD?
- A) ₹40,000
- B) ₹50,000
- C) ₹75,000
- D) ₹1 lakh Answer: D) ₹1 lakh
Conclusion
Staying updated with these key changes is crucial for better financial planning and compliance. Make sure to adapt to these updates to avoid penalties and maximize benefits. For more insightful articles, visit our homepage.