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April 1 marks the start of the new financial year (FY2024-25). All the updated regulations for the income tax regime outlined in the Union Budget take effect from this date. Finance Minister Nirmala Sitharaman announced the interim Budget in February, which will be effective from FY25.
Here is a list of some updated rules related to the tax regime, National Pension System (NPS), Employees’ Provident Fund Organisation (EPFO), insurance, and mutual funds (MFs), among others.
Tax slab
According to the interim Budget, income tax slabs remained unchanged for the new financial year (FY2024-25), consistent with those of FY2023-24. Income from Rs zero to Rs 3,00,000 will be exempted from tax. The income slab from Rs 3,00,001 to Rs 6,00,000 will be taxed at 5 per cent, Rs 6,00,001 to Rs 9,00,000 at 10 per cent, Rs 9,00,001 to Rs 12,00,000 at 15 per cent, Rs 12,00,001 to Rs 15,00,000 at 20 per cent, and Rs 15,00,000 and above at 30 per cent.
According to the Budget, a new tax regime has been introduced as the default tax regime. However, taxpayers have the option to choose either the new tax regime or the old tax regime.
Advantages of the new tax regime
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>No need to maintain a record of travel and rent receipts
>Basic exemption limit has been elevated from Rs 2.5 lakh to Rs 3 lakh
>Increased the taxable limit to Rs 7 lakh from Rs 5 lakh.
>Surcharge rates have been reduced from 37 per cent to 25 per cent. These reduced rates are applicable for taxpayers with income exceeding Rs 5 crore
Life insurance policies
According to Union Budget 2023, under the new tax regime, the amount obtained from life insurance policies will be taxable if the yearly premium paid is more than Rs 5 lakh in a year.
E-insurance
The Insurance Regulatory and Development Authority of India (IRDAI) previously announced that digitisation of insurance policies will become mandatory from April 1, 2024. This mandate will apply to all insurance categories, encompassing life, health, and general insurance, requiring policies to be issued electronically.
Small Saving Schemes
Interest rates on various small savings schemes will remain unchanged for the quarter beginning April 1, 2024.
Deposits under the Sukanya Samriddhi scheme will attract an interest rate of 8.2 per cent, while the rate on a three-year term deposit remains at 7.1 per cent.
The interest rates for the popular Public Provident Fund (PPF) and post office savings deposits scheme too have been retained at 7.1 per cent and 4 per cent, respectively.
The interest rate on the Kisan Vikas Patra will be 7.5 per cent, and the investments will mature in 115 months.
The interest rate on the National Savings Certificate (NSC) will remain at 7.7 per cent for the April-June 2024 period. Like the current quarter, the Monthly Income Scheme (MIS) will earn 7.4 per cent for investors.
National pension system (NPS)
The Pension Fund Regulatory and Development Authority (PFRDA) introduced a two-factor authentication measure for security improvement. A two-factor Aadhaar-based authentication will be mandatory for all password-based logins into the CRA system.
EPFO
The Employees’ Provident Fund Organisation will now automatically transfer a subscriber’s balance to their new organisation when they change jobs. EPFO account holders do not require a request to transfer the PF amount.
Revises retail prices of 65 formulations
According to the Department of Pharmaceuticals, the revised ceiling rates are scheduled to come into effect from April 1. The formulations in the revised rate list include essential drugs such as painkillers, antivirals, antibiotics, antimalarials, and drugs for type 2 diabetes.
The revision in ceiling and retail prices comes after the National Pharmaceutical Pricing Authority (NPPA) announced a 0.00551 per cent increase in prices of drugs included in the National List of Essential Drugs (NLEM), based on changes in the wholesale price index (WPI).
With the changes, manufacturers may now increase the maximum retail price (MRP) of scheduled formulations based on WPI, without needing any prior approval from the government in this regard.
FASTag
It is mandatory to complete the Know Your Customer (KYC) for the car’s FASTag with the bank before March 31 to prevent deactivation by banks. Without the KYC process, payment will not be completed. The National Highways Authority of India (NHAI) has advised FASTag users to comply with Reserve Bank of India (RBI) rules for smooth transactions of toll tax charges at toll plazas.
'One Vehicle, One FASTag' initiative that aims to discourage the use of single FASTag for multiple vehicles or linking multiple FASTags to a particular vehicle, has come into force from April 1.
Mutual Funds
Without KYC, investors are not allowed to make mutual funds transactions, from April 1. These transactions include Systematic Investment Plans (SIPs), Systematic Withdrawal Plans (SWPs), and redemptions. KYCs that were done based on proofs such as bank statements and utility bills will no longer be valid after March 31. The officially valid documents are now Aadhaar ID, passport and voter ID, among others.
Emails were sent by registrar and transfer agents (RTAs), CAMS (Computer Age Management Services), and KFin Technologies (KFintech) to mutual fund distributors that mutual fund investors should redo their KYC by March 31.
Credit and debit card
Several Indian banks have announced important changes to their credit and debit card policies, effective from April 2024. Details here
SBI credit & debit card
Several Indian banks have announced important changes to their credit and debit card policies, effective from April 2024. Details here
SBI credit & debit card
Starting April 1, 2024, SBI Card will implement changes to its reward points policy, particularly affecting the accumulation of points on rental payments. This revision will impact a range of its credit cards, notably the AURUM, SBI Card Elite, and SimplyCLICK SBI Card, among others.
Effective April 1, 2024, SBI will raise the annual maintenance charges by Rs 75 for certain debit cards, as detailed on their website.
ICICI Bank credit card
Complimentary lounge access: From April 1, customers can avail of one free airport lounge visit by achieving a spend threshold of Rs 35,000 within the preceding calendar quarter. This stipulation applies for access during the April-June 2024 quarter, with similar requirements set for future quarters to obtain lounge access.
Axis Bank credit card
Changes to Magnus credit card: Effective from April 20, revisions will be made to the Axis Bank Magnus Credit Card, including changes to the reward points earnings mechanism and the lounge access scheme.
