As the new financial year begins on April 1, 2025, several significant changes in taxation, banking, credit cards, and financial policies will come into effect. These changes, announced in the Union Budget 2025, will directly impact your personal finances. Let’s take a closer look at the key updates you need to be aware of.
Taxation Changes: Relief for Taxpayers
One of the biggest changes is the increase in the basic exemption limit. The limit has been raised from ₹3 lakh to ₹4 lakh, providing relief to individual taxpayers. Those opting for the new tax regime will particularly benefit as no tax will be levied on annual earnings up to ₹12 lakh. Additionally, salaried employees will receive a standard deduction of ₹75,000, allowing tax-free income up to ₹12.75 lakh.
For high-income earners, the government has increased the tax threshold. Previously, those earning over ₹15 lakh were taxed at 30%. From April 1, only individuals earning above ₹24 lakh will be taxed at this rate. This move aims to strengthen the financial position of middle-class and high-income taxpayers.
Changes in Banking Policies
New banking rules regarding minimum account balance requirements will be implemented from April 1. State Bank of India (SBI), Punjab National Bank (PNB), and Canara Bank have revised their policies. Customers in urban areas may be required to maintain a minimum balance of ₹5,000, while those in rural areas must maintain ₹2,000. Failure to maintain the required balance will result in penalties, though official notifications from banks are still awaited.
Credit Card Rewards Program Overhaul
SBI Cards and Axis Bank have revised their credit card reward programs. Key changes include:
- SBI Cards has discontinued complimentary flight ticket vouchers for some premium cards, including Club Vistara SBI Card, SimplyClick SBI Card, and Air India SBI Platinum.
- Reward points on certain transactions, such as Swiggy payments and Air India bookings, have been reduced.
- However, the renewal fee of approximately ₹3,000 has been waived for select SBI Cards.
- Axis Bank has also made modifications to its Vistara credit card benefits, including discontinuation of free Maharaja Club memberships and other perks.
FD Interest and TDS Exemptions for Senior Citizens
Senior citizens will enjoy increased tax benefits on fixed deposit (FD) interest earnings. The TDS exemption limit has been raised from ₹50,000 to ₹1 lakh. For non-senior citizens, the exemption limit on interest earnings from FDs and recurring deposits (RDs) has been increased from ₹40,000 to ₹50,000. These changes will help retirees and savers retain more of their earnings.
Dividend Income and TDS Exemption
Investors earning dividends from shares and mutual funds will benefit from an increased TDS exemption. Previously, dividend income up to ₹5,000 was tax-free; this limit has now been doubled to ₹10,000.
Liberalized Remittance Scheme (LRS) Changes
The Reserve Bank of India (RBI) has revised LRS rules under which overseas remittances for education and medical expenses up to ₹10 lakh will now be exempt from TDS. Earlier, remittances exceeding ₹7 lakh were subject to a 5% tax.
UPI Transaction Security Enhancements
To prevent fraud and ensure security, new UPI transaction rules will be enforced:
- Banks and UPI service providers must update transaction data weekly.
- Customers will be required to confirm their UPI ID before using it for payments.
- Monthly reports must be shared with NPCI regarding UPI numeric IDs.
Changes in Mobile Number Retention Policies
According to new telecom rules, if a mobile number remains inactive for 90 days (no calls, texts, or data usage), the telecom provider may reassign it to a new user. Additionally, banks and UPI apps will verify customer mobile numbers weekly to prevent fraud.
Price Hikes in Automobiles and Fuel
Several automobile manufacturers, including Mahindra & Mahindra, Tata Motors, and Maruti Suzuki, have announced price hikes effective April 1. SUVs and electric vehicles may see up to a 3% increase in prices.
Additionally, LPG, CNG, and PNG prices may be revised. The last revision in March 2025 saw a ₹6 increase in commercial LPG cylinder prices, while domestic gas prices remained unchanged.
These upcoming financial changes are set to impact taxpayers, investors, and general consumers. Staying informed about these updates can help you plan your finances better and avoid unnecessary penalties or expenses.
These upcoming financial changes are set to impact taxpayers, investors, and general consumers. Staying informed about these updates can help you plan your finances better and avoid unnecessary penalties or expenses.
Disclaimer: The information in this article is for general informational purposes only and should not be considered professional financial advice. Please consult with a certified financial expert or relevant authorities before making any financial decisions.
