Changes Effective from 1st April 2025

Starting from April 1, 2025, several important changes will directly affect your finances. Major announcements made in the new budget will come into effect today, including tax relief, price changes for goods, and more.

Tax Slab Changes

Under the new tax regime, no tax will be levied on earnings up to ₹12 lakh. With the standard deduction of ₹75,000, the total income threshold becomes ₹12.75 lakh. A new tax slab of 25% has been introduced for income between ₹20 lakh and ₹24 lakh. Previously, a 30% tax was applied on earnings above ₹15 lakh, but this has now been raised to ₹24 lakh, providing relief to the middle class.

TDS Limit Changes

The TDS limit on rental income has been increased from ₹2.4 lakh to ₹6 lakh, meaning no tax will be levied on rental income up to ₹6 lakh. For senior citizens, the TDS limit on interest from fixed deposits has been raised from ₹50,000 to ₹1 lakh. The TDS limit for professional services has also been increased from ₹30,000 to ₹50,000, offering relief to small and large traders, the middle class, and senior citizens.

Relief for Sending Money Abroad

If you are sending money abroad for your children’s education, no TCS will be levied on amounts up to ₹10 lakh (previously ₹7 lakh). Additionally, if the money is borrowed from a bank, TCS exemption will apply. Previously, amounts exceeding ₹7 lakh were subject to TCS ranging from 0.5% to 5%, causing issues during transfers.

Other Changes Effective from April 1, 2025:

1. Stock Market: A PAN card and Aadhaar card will now be required to receive dividends from the stock market.
2. Demat and Mutual Funds: KYC and nominee details must be updated in demat accounts. If not updated, the accounts will be closed.
3. Bank Accounts: Banks will require a minimum balance in savings accounts. Failure to maintain the minimum balance will result in penalties.
4. Tax Filing: Individuals will now be allowed to file an updated tax return up to 48 months (4 years) after the assessment year. However, additional taxes will apply: 60% for returns filed between 24 to 36 months and 70% for returns filed between 36 to 48 months.
5. ULIP (Unit Linked Insurance Plan): Changes in ULIP tax rules have been introduced. If the annual premium exceeds ₹2.5 lakh, it will be considered a capital asset. Long-term capital gains tax (12.5%) will apply if held for more than 12 months; short-term capital gains tax (20%) will apply if held for less than 12 months.
6. UPI Changes: Inactive UPI accounts will be closed, and it will be mandatory to link old numbers to your account.
7. Bank FD and Savings Interest Rates: New interest rates will come into effect in banks such as SBI, HDFC, and IDBI.
8. Gas Cylinder Price Drop: Commercial gas cylinder prices will be reduced by ₹40 in all major cities. However, domestic gas cylinder prices have not changed in the past 11 months.
9. Cheque Rules: A positive pay system will be mandatory for cheques exceeding ₹50,000. This means that before a cheque is issued, the bank will be electronically notified to prevent fraud.

These changes will significantly impact various aspects of personal finance, taxes, and banking, providing relief to some and requiring adjustments for others.