Major Financial Rule Changes Take Effect from April 1, 2025

As the new financial year begins on April 1, several regulatory changes will take effect, impacting income tax, credit card rewards, and UPI services. Key modifications include revised tax slabs, changes in TDS and TCS limits, and adjustments in financial transactions. Here are the details:

Revised Income Tax Structure

The latest budget introduced significant changes to the income tax framework. Under the new tax regime, individuals earning up to Rs 12 lakh annually will not be required to pay income tax. A standard deduction of Rs 75,000 increases this limit to Rs 12.75 lakh for salaried employees. Additionally, the tax rebate has been raised from Rs 25,000 to Rs 60,000.

TDS and TCS Adjustments

Modifications in tax deduction at source (TDS) and tax collection at source (TCS) have been proposed. For senior citizens, the TDS exemption on interest income from bank deposits has increased from Rs 50,000 to Rs 1 lakh. For individuals below 60 years, the exemption limit has been raised from Rs 40,000 to Rs 50,000.

Changes in TCS apply to foreign remittances under the Liberalized Remittance Scheme (LRS). Previously, TCS was applicable if remittances exceeded Rs 7 lakh annually. This threshold has now been raised to Rs 10 lakh. Furthermore, education loans used for international tuition payments will no longer attract TCS.

Credit Card Reward Program Modifications

SBI Cards and other issuers are altering their reward structures. Benefits associated with Swiggy and Air India ticket bookings will be reduced for SBI SimplyClick, Air India SBI Platinum, and Air India SBI Signature credit cards starting April 1. Axis Bank will adjust its Vistara credit card rewards from April 18, following the airline’s merger with Air India. IDFC First Bank will waive annual fees for Vistara card renewals post-March 31, but certain perks will be discontinued.

UPI Service Revisions

The National Payments Corporation of India (NPCI) has directed banks and payment service providers to deactivate UPI services linked to inactive or reassigned mobile numbers from April 1. This move aims to mitigate unauthorized transactions and fraud risks. Additionally, UPI Lite users will gain the ability to transfer wallet funds back to their bank accounts. To enhance security, app PINs, passcodes, or biometric authentication will now be mandatory for UPI Lite transactions.

Taxation on ULIPs and Vatsalya Investments

Capital gains tax will be applicable on withdrawals from Unit Linked Insurance Plans (ULIPs) if the annual premium exceeds Rs 2.5 lakh. This revision aligns with the 2025 Budget proposals.

The NPS Vatsalya scheme, designed for long-term investments in children’s financial security, now qualifies for tax exemption under Section 80CCD (1B). However, this benefit is exclusive to individuals under the old tax regime.

With these updates set to take effect, taxpayers, investors, and digital payment users should review these changes to align their financial planning accordingly.