New Financial Year Begins: Key Changes Starting April 1

With the start of the Financial Year 2025-26 on April 1, several key changes will impact taxpayers across the country.

Here’s a list of the key changes:

• New income tax slabs: Individuals earning up to ₹12 lakh annually will no longer need to pay income tax. For salaried individuals, a standard deduction of ₹75,000 will apply, making a ₹12.75 lakh salary tax-free under the new tax regime. These changes were announced by Union Finance Minister Nirmala Sitharaman in the Union Budget on February 1 and approved as part of the Finance Act, 2025, last week.

• TDS rationalisation: The dividend tax deduction threshold has been increased from ₹5,000 to ₹10,000. Starting April 1, 2025, tax will only be deducted at source on dividend income exceeding ₹10,000, benefiting equity and mutual fund investors.

• Phasing out inactive numbers linked to UPI: UPI payments from inactive numbers will not be allowed after April 1. The National Payments Corporation of India (NPCI) has instructed public and private sector banks and third-party UPI providers (such as PhonePe and Google Pay) to implement guidelines to phase out inactive numbers linked to UPI due to security concerns.

• Changes in credit card benefits: The reward points structure for certain cards, including the SBI Card with SimplyCLICK and Air India SBI Platinum Credit Card, is set to be revised. The Vistara Credit Card benefits will also change following the airline’s merger with Air India.

• Unified Pension Scheme: Effective from April 1, the Unified Pension Scheme (UPS) will replace the old pension scheme (OPS), impacting approximately 23 lakh central government employees with at least 25 years of service. Employees with at least 25 years of service will be eligible for a pension equivalent to 50% of their last 12 months’ average basic salary.

• GST-related changes: From April 1, multi-factor authentication (MFA) will be mandatory on the Goods and Services Tax (GST) portal for enhanced security. Additionally, E-Way Bills (EWBs) can only be generated for base documents less than 180 days old.

• Minimum balance in banks: Major banks such as the State Bank of India (SBI), the Punjab National Bank (PNB), and Canara Bank will enforce updated minimum balance requirements starting April 1. Account holders failing to maintain the minimum balance will face penalties.

• Aadhaar-PAN linking: Individuals who have not linked their PAN with Aadhaar will be unable to receive dividend payouts from stock market investments. Additionally, TDS will be deducted at higher rates for such individuals.

• Housing loan limit revised for enhanced PSL coverage: The Reserve Bank of India (RBI) has increased the housing loan limits under Priority Sector Lending (PSL) to Rs.50,000 in centres with a population of 50 lakh and above.

• Increase in national highway tolls: Tolls for national highways across the country will increase by around 3% starting April 1.

The other changes include the removal of the equalisation levy on online advertisements, price increases for select essential medicines, price reductions for commercial LPG gas cylinders, etc.