As the new financial year begins, several key policy changes come into effect, impacting taxpayers, pensioners, and digital payment users. Here’s a breakdown of the most significant updates starting April 1, 2025.
1. Updated Income Tax Slabs
The Indian government has revised the tax slab structure under the new regime:
• Up to ₹4,00,000 – No tax
• ₹4,00,001 to ₹8,00,000 – 5% tax
• ₹8,00,001 to ₹12,00,000 – 10% tax
• ₹12,00,001 to ₹16,00,000 – 15% tax
• ₹16,00,001 to ₹20,00,000 – 20% tax
• ₹20,00,001 to ₹24,00,000 – 25% tax
• Above ₹24,00,000 – 30% tax
Additionally, the exemption limit has been increased from ₹3 lakh to ₹4 lakh, benefiting lower-income groups by reducing their tax burden.
2. Higher TDS Exemption Limits
Tax Deducted at Source (TDS) limits on interest income have been increased:
• For individuals below 60 years – Raised from ₹40,000 to ₹50,000
• For senior citizens – Increased from ₹50,000 to ₹1,00,000
This change is designed to provide financial relief, particularly to retirees who rely on interest income.
3. Launch of the Unified Pension Scheme (UPS)
A new pension scheme, the Unified Pension Scheme (UPS), has been introduced as an alternative to the National Pension System (NPS). Under UPS, retirees with a minimum of 25 years of service will receive 50% of their average last 12 months’ basic salary as a pension.
4. Strengthened UPI Security Measures
The Reserve Bank of India (RBI) has introduced new security protocols for Unified Payments Interface (UPI) transactions. Users must now explicitly authorize any changes to their numeric UPI IDs, reducing the risk of fraud and unauthorized modifications.
5. No Change in Small Savings Scheme Interest Rates
The government has decided to maintain the current interest rates for Post Office Savings Schemes, including:
• Public Provident Fund (PPF)
• National Savings Certificate (NSC)
• Senior Citizens Savings Scheme (SCSS)
This move ensures stability for investors relying on these schemes for long-term wealth accumulation.
6. Modifications in Credit Card Reward Programs
Banks and financial institutions have revised their credit card reward policies. Cardholders are advised to review their updated benefits, as some perks and cashback schemes may be altered.
7. End of the Mahila Samman Savings Certificate Scheme
The Mahila Samman Savings Certificate scheme, introduced to promote women’s financial independence, has ended as of March 31, 2025. While existing investments will continue earning interest, no new deposits are allowed under this scheme.
8. Increase in Toll Fees and Medicine Prices
Commuters and travelers will face higher highway toll charges starting April 2025. Additionally, the prices of several essential medicines have been revised, affecting healthcare expenses for consumers.
Key Takeaways
These financial changes impact various aspects of personal finance, from taxation and pensions to digital transactions and savings schemes. Staying updated on these developments is crucial for effective financial planning in the new financial year.
Note: This article is for informational purposes only and does not constitute financial advice. Readers are encouraged to consult with financial professionals for personalized guidance.