NEW DELHI – As April 1, 2025, marks the beginning of a new financial year, India is bracing for a series of regulatory and financial changes that will touch the lives of taxpayers, digital payment users, and pensioners. These changes, ranging from revisions in income tax slabs to modifications in UPI regulations and the introduction of a Unified Pension Scheme, are poised to reshape the personal finance landscape for millions across the country.

Finance Minister Nirmala Sitharaman, in her recent budget announcement, unveiled key changes in tax slabs, most notably an increase in the income tax exemption limit to Rs 12 lakh per annum. This move is expected to provide significant relief to taxpayers. Simultaneously, digital payment platforms will be subject to stricter compliance measures, including the deactivation of UPI services for mobile numbers that have remained inactive for an extended period.

Here's a detailed look at the major changes taking effect from April 1:

Lower Tax Burden: Taxpayers operating under the new tax regime can anticipate a reduction in their annual income tax liability by up to Rs 1.1 lakh. The new regime also extends a tax rebate to those earning up to Rs 12 lakh annually, a considerable increase from the previous limit of Rs 7 lakh.

TDS Relief: Senior citizens will benefit from a doubled limit on interest earned, now up to Rs 1 lakh per year. Additionally, the annual limit on rent has been increased from Rs 2.4 lakh to Rs 6 lakh, providing further financial flexibility.

Remittances Less Taxing: The threshold for tax collected at source (TCS) has been raised from Rs 7 lakh to Rs 10 lakh. Notably, there will be no TCS on remittances for education funded through loans from banks and select financial institutions, easing the burden on students and their families.

Pension Bonanza: Central government employees who joined their service from 2004 onwards will have the option to shift to the Unified Pension Scheme. This scheme offers an assured pension equivalent to 50% of the last pay drawn, along with inflation adjustment and a monthly payout of Rs 10,000 after completing 10 years of service.

Increased Toll on Highways: Commuters should prepare for a rise in toll charges on National Highways, with an expected increase of around 3%. This annual hike is implemented to cover price increases and maintain the quality of road infrastructure.

Medicines to Cost More: The prices of approximately 800 medicines are set to increase marginally, as the drug price regulator allows for inflation adjustment. This change will likely impact the healthcare expenses of many households.

Gas Prices Rise: Consumers may experience higher costs for CNG and piped natural gas, as the government permits a price hike on domestically produced gas from legacy fields. This adjustment could affect household budgets and transportation costs.

Security Check for UPI: Banks and third-party providers will implement measures to phase out inactive UPI numbers, enhancing the security and integrity of digital payment systems.

GST Tweaks: The generation of e-way bills and e-invoices will now require multi-factor authentication, adding an extra layer of security. A new Input Service Distributor mechanism will also be implemented to streamline GST processes.

Small Loans: Banks are now permitted to extend home loans up to Rs 50 lakh in metro cities under priority sector lending norms, potentially boosting the housing sector.

These changes, effective from April 1, 2025, are set to have a wide-ranging impact on the financial lives of Indian citizens, necessitating careful planning and adaptation.