India (Commonwealth Union)_ April 1st marks the beginning of a new fiscal year in India. This is highly significant as the majority of the new tax laws outlined in Finance Minister Nirmala Sitharaman’s budget go into force on this day. Hence, awareness is necessary as these changes may also have an influence on people’s budget. Additionally, the new fiscal year incorporates modifications to the regulations governing your savings programs (NPS and EPFO), taxes, FASTags, and other financial programs. Hence, knowledge of these developments can help save money and prevent any hassles like breaching rules. Furthermore, as of April 1, these 8 new tax rules in India will mark significant financial changes for the fiscal year 2024-2025. Accordingly, these alterations range from the default adoption of the New Tax Regime to heightened security measures in NPS login processes.
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1. New income tax regime
Commencing April 1, 2024, the New Tax Regime will automatically apply to taxpayers unless they specifically opt for the old tax structure. The income tax slabs under this regime remain consistent for FY 2024-2025 (AY 2025-2026), with tax rates ranging from 0% to 30%.
Annual income up to Rs 3 lakhs: 0% tax
Rs 3 lakhs – 6 lakhs : 5% tax
Rs 6 lakhs – 9 lakhs : 10% tax
Rs 9 lakhs -12 lakhs : 15% tax
Rs 12 lakhs -15 lakhs : 20% tax
Above Rs 15 lakhs : 30% tax
Notably, the surcharge rate for those earning over Rs 5 crore annually has been reduced from 37% to 25%, and a standard deduction of Rs 50,000 has been incorporated into the New Tax Regime. Additionally, maturity proceeds from life insurance policies issued after April 1, 2023, exceeding Rs 5 lakh in total premium, will be subject to taxation. Furthermore, the rebate limit under Section 87A has been raised to Rs 25,000 for individuals with taxable income up to Rs 7 lakh.
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2. New NPS rule
The Pension Fund Regulatory and Development Authority (PFRDA) is set to introduce improved security measures in the National Pension System (NPS) login process effective April 1. This entails the mandatory implementation of two-factor Aadhaar authentication (2-FA) for all users accessing the Central Recordkeeping Agency (CRA) system of NPS.
3. Ola Money
OLA Money will transition entirely to small prepaid payment instrument (PPI) wallet services, with a maximum monthly wallet load limit of Rs 10,000, starting April 1.
4. FASTag rule
It is imperative to complete the KYC process for your car’s FASTag before March 31; otherwise, it may be deactivated by the bank.
5. New credit card rules
Changes in credit card regulations are also slated for April 1. Notably, certain SBI credit cards will no longer accrue reward points on rent payments, while ICICI Bank will offer complimentary airport lounge access to cardholders spending Rs 35,000 or more in the preceding quarter. Similarly, YES Bank credit cardholders spending Rs 10,000 or more in a calendar quarter will qualify for complimentary domestic lounge access. Conversely, Axis Bank’s Magnus Credit Card holders will no longer earn reward points on insurance, gold/jewelry, and fuel expenditures. Additionally, the eligibility criteria for accessing domestic airport lounges have been revised, now requiring a minimum expenditure of Rs 50,000 in the previous three months.
6. New debit card rules
SBI will implement an annual maintenance charge increase of Rs 75 for certain debit cards, effective April 1.
7. Mutual funds
Asset managers will cease inflows into mutual fund schemes investing in overseas exchange-traded funds (ETFs) from April 1, following SEBI’s directives. Moreover, investors who have not updated their KYC details will be unable to carry out any mutual fund transactions, including SIPs, SWPs, and redemptions.
8. Mandatory e-insurance
Starting April 1, all insurance policies, encompassing life, health, and general insurance, must be issued electronically in compliance with the mandate from the Insurance Regulatory and Development Authority of India (IRDAI).
