Key Tax & Financial Changes from April 1: Income Tax Relief, UPI Deactivation, GST & More

From April 1, 2025, few important changes have been made in terms of tax and financial rules. These announcements and changes from previous months that were also summarized in the Union Budget 2025 impact a multitude of personal finance-related topics, from taxation to banking to investment.

Exemptions and Relief Under Income Tax

A key change is the increased income tax exemption limit under the new tax system. Individuals with an annual income of up to ₹12 lakh will not have to pay income tax. Furthermore, salaried individuals can benefit from a standard deduction of ₹75,000, which means that income up to ₹12.75 lakh will be tax-free. This revised tax structure applies to income earned between April 1, 2025, and March 31, 2026. To claim a rebate, taxpayers with income up to ₹12.75 lakh still need to file their returns. The revised system aims to provide tax relief across different income levels.

UPI Deactivation for Inactive Numbers

Now for security measures, the NPCI (National Payments Corporation of India) will block UPI (Unified Payments Interface) IDs associated with mobile numbers not in use in a long time. If a UPI account-linked mobile number is generated and inactive or a mobile number has been reassigned and is now being misused, banks may delete the number from its records and suspend associated UPI services. Persons with UPI accounts linked to old or inactive numbers are required to update their mobile numbers with the banks before 1st April, failing which they will be deactivated and face disruption in digital transactions. This step is meant to address technical problems and lower the potential for fraud.

Unified Pension Scheme (UPS)

The unified pension scheme (UPS) for central government staff, currently enrolled under the national pension system (NPS), will be effective from April 1. According to the scheme, government employees with at least 25 years of service will be eligible for a pension of 50% of the average basic salary of the last 12 months. The government launched the UPS in August 2024 and it is now coming into effect.

Revised PAN-Aadhaar Linking Rules

Here are the things that will happen if you're one of those who haven't linked your PAN with the Aadhaar number till March 31, 2025. They would not earn dividend income, Tax Deducted at Source (TDS) will increase and no credit will get created under Form 26AS.

Amendments in GST Laws/Rules/Procedure

From April 1, several changes will come into effect in the Goods and Services Tax (GST) system. To strengthen online security for taxpayers, it is now mandatory to use multi-factor authentication (MFA) when signing into the GST portal. Moreover, e-way bills are only able to be generated for documents that are less than 180 days old, which increases compliance significantly. Additionally, all hotels with daily room tariff of more than ₹7,500 will be defined as ‘Specified Premises’, which attracting an 18% GST on restaurant services provided in these hotels, but businesses operating therein can avail of input tax credit.

Minimum Required Amount in Banking Accounts

Popular public sector banks, including State Bank of India (SBI), Punjab National Bank (PNB) and Canara Bank, have revised its minimum balance requirements. The minimum balance is now determined by the location of opening the account (rural, semi-urban and urban). Those who do not maintain the requisite minimum balance may be penalised from April 1.

Most banks also require KYC for opening a savings account

Beginning April 1, Know Your Customer (KYC) verification has been mandatory for all mutual fund and demat accounts. During this process, nominee information will also undergo re-verification to ensure compliance and security.

Important Details on Higher PSLA for Home Loans

From April 1, the home loan borrowers can avail higher loan limits under Priority Sector Lending. The new limits are ₹50 lakh in metro cities, ₹45 lakh in Tier-2 cities and ₹35 lakh in small cities.

Cheque Positive Pay System

In order to curb cheque fraud, a Positive Pay System will be introduced by banks. In the case of cheques of ₹50,000 and above, the detail of the cheque issued should be communicated by the issuer electronically to the bank to enable verification before the cheque is cleared.

Seniors over 60 years of age have increased TDS limit

The limit for Tax Deducted at Source (TDS) on interest income for senior citizens has been raised from 50,000 to ₹1 lakh from April 1. For the remaining, the TDS limit on bank interest is also increased to ₹50,000. Further, TDS threshold on receipt of dividend income has also been raised to ₹10,000.

Tax Collected at Source (TCS) Changes

The threshold for Tax Collected at Source (TCS) on overseas remittances under the Liberalised Remittance Scheme has been hiked from the existing ₹7 lakh to ₹10 lakh. The applicability of TCS was revised upwards through the Union Budget 2025, with the effective date April 1, 2025.

Toll Tax Increase

From today, the toll prices for national highways in India have gone up by around 3 per cent for different routes and at different toll plazas. For example, the one-way fare for cars and jeeps driving from Sarai Kale Khan to Meerut via the Delhi-Meerut Expressway will go up to ₹170, an increase in ₹5. Similar jumps occur at other toll plazas and for other vehicle types.

Changes for Credit Card Users

SBI Cards is at the forefront of a huge change in credit card benefits. From July 26, 2025, customers of SBI cards will not get free insurance coverage during air and rail accidents. SBI is also revising its rewards programme and the number of reward points earned per ₹100 spent is set to drop from 15% to 5%. IDFC First, Axis Bank and other banks are also removing some benefits from their credit cards, including milestone benefits, welcome vouchers and free memberships.

Abolition of Equalisation Levy on Digital Transactions

The equalisation levy on digital transactions, introduced in the Finance Act 2020, has been scrapped in the Finance Act 2025. The levy was a 2% charge on e-commerce operators and 6% on online advertisements. It proposed to remove this levy with an aim to streamline digital transactions, alleviate the burden of tax on non-resident digital service providers, and incentivise greater foreign investment into India’s digital economy.

Revision of LPG Cylinder Prices

The price of commercial LPG gas cylinders was reduced by oil marketing companies. As of today, the price of a 19 kg commercial LPG cylinder is ₹41 lower, bringing the retail price in Delhi to ₹1,762.

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