Several important financial and tax changes will come into effect from April 1, 2025, impacting taxpayers, UPI users, credit card holders, investors, and those engaging with financial institutions. These changes stem from the Union Budget 2025 and regulatory updates from bodies such as SEBI, RBI, and NPCI.
1. New Income Tax Slabs and Exemptions
The most notable tax reform includes new income tax slabs and exemptions. The new tax regime will ensure that no tax is levied on income up to Rs. 12 lakh annually, with salaried individuals benefiting from a standard deduction of Rs. 75,000, making income up to Rs. 12.75 lakh tax-free under the revised system. These changes are aimed at reducing the tax burden for middle-income earners.
2. Deactivation of Inactive UPI Accounts
The National Payments Corporation of India (NPCI) has announced that UPI accounts linked to mobile numbers that have been inactive for extended periods will be deactivated starting April 1, 2025. This initiative is aimed at improving security and reducing the risk of dormant account misuse. Users need to ensure their UPI-linked mobile numbers are active and updated to avoid account deactivation.
3. Revised Credit Card Rewards and Benefits
Several banks, including SBI and Axis Bank, will revise their credit card reward structures. For example, SBI credit cardholders, such as those using the SimplyCLICK or Air India SBI Platinum cards, will see changes in their rewards programs. Additionally, Axis Bank is adjusting the benefits of its Vistara credit card due to the merger of Air India and Vistara, which will affect travel-related perks.
4. Unified Pension Scheme for Government Employees
A new Unified Pension Scheme (UPS) will come into effect for central government employees with at least 25 years of service. The UPS will provide a pension equal to 50% of the average basic salary from the last 12 months of service, offering financial security post-retirement.
5. Multi-factor Authentication for GST Portal Access
The Goods and Services Tax (GST) system will implement mandatory Multi-Factor Authentication (MFA) for accessing the GST portal from April 1, 2025. This will enhance the portal’s security and minimize fraud. Additionally, E-Way Bills (EWB) will only be generated for documents that are no older than 180 days.
6. Changes in GST for Hotel Services
Hotels with room tariffs exceeding Rs. 7,500 per day will now be classified as "Specified Premises." Restaurant services within such hotels will attract 18% GST but will be eligible for input tax credit, providing relief to businesses in the hospitality sector.
7. Minimum Balance Requirements in Banks
Several banks, including SBI and Punjab National Bank, have updated their minimum balance requirements. Customers must ensure they maintain the minimum balance in their savings accounts to avoid penalties starting from April 1.
8. Positive Pay System for High-Value Checks
To combat cheque fraud, the Positive Pay System will be introduced for cheque payments exceeding Rs. 50,000. Under this system, account holders must electronically provide cheque details to the bank, which will then verify the information before processing the payment.
9. Stricter KYC for Mutual Fund and Demat Accounts
From April 1, 2025, KYC (Know Your Customer) will become mandatory for mutual fund and demat accounts. This includes re-verification of nominee details. Investors should ensure their KYC details are up to date to avoid disruptions in their accounts.
10. DigiLocker for Storing Investment Statements
Investors can now store their demat account holding statements and consolidated account statements (CAS) directly in DigiLocker from April 1. This initiative, introduced by SEBI, will simplify the management of investments and help prevent asset loss. In case of the investor's death, designated nominees will have view-only access to these documents.
11. Revised Priority Sector Lending Limits for Home Loans
The limits for home loans under Priority Sector Lending (PSL) will be revised. From April 1, loans of up to Rs. 50 lakh will be available in metro cities, Rs. 45 lakh in Tier-2 cities, and Rs. 35 lakh in smaller cities, aiming to promote affordable housing.
12. Increased TDS Limit for Senior Citizens
The TDS (Tax Deducted at Source) limit for senior citizens on interest income has been raised to Rs. 1 lakh, reducing the tax burden for senior citizens and offering more exemptions.
13. Higher TCS Limit for Foreign Transactions
The Tax Collected at Source (TCS) limit for foreign travel and investment transactions has been increased from Rs. 7 lakh to Rs. 10 lakh. This change, effective from April 1, aims to ease the financial burden on individuals making high-value international transactions.
14. Dividend and TDS Restrictions for Non-linking of PAN-Aadhaar
Starting April 1, individuals who fail to link their PAN with Aadhaar by March 31 will face restrictions on receiving dividend income. Additionally, TDS will increase, and no credit will be reflected in Form 26AS. Taxpayers must ensure their PAN-Aadhaar linkage is completed to avoid penalties.
15. Stricter Rules for Mutual Fund Deployments
SEBI has introduced new regulations for the deployment of funds raised through new fund offers (NFOs). Asset Management Companies (AMCs) must deploy these funds within 30 business days, and failure to do so will require investors to be allowed to exit without penalties.
16. Revised TCS Rules for Large Transactions
The new TCS rules will apply to high-value transactions, including foreign travel and large investments, with the threshold raised to Rs. 10 lakh, starting April 1.