April 1 marks the start of the new financial year (FY2024-25). All updated regulations regarding the income tax regime outlined in the Union Budget come into force from this date. Finance Minister Nirmala Sitharaman announced the interim budget in February, which will come into effect from FY25.
Here is a list of some updated rules related to tax regime, National Pension System (NPS), Employees Provident Fund Organization (EPFO), Insurance and Mutual Funds (MF ), among others.
Tax slab
According to the interim budget, income tax slabs have remained unchanged for the new financial year (FY 2024-25), in line with those of FY 2023-24. Income from Rs zero to Rs 3,00,000 will be exempt from tax. The income bracket of Rs 3,00,001 to Rs 6,00,000 will be taxed at 5 percent, Rs 6,00,001 to Rs 9,00,000 at 10 percent, Rs 9,00,001 to Rs 12,00,000 at 15 percent, Rs 12,00,001 to Rs 15,00,000 at 20 percent, and Rs 15,00,000 and above at 30 percent.
According to the budget, a new tax regime has been introduced as the default tax regime. However, taxpayers have the option of choosing either the new tax regime or the old tax regime.
Advantages of the new tax regime
>No need to keep track of travel and rent receipts
>The basic exemption limit has been increased from Rs 2.5 lakh to Rs 3 lakh
>Increase in taxable limit from Rs 7 lakh to Rs 5 lakh.
>Markup rates have been reduced from 37 percent to 25 percent. These reduced rates are applicable to taxpayers whose income exceeds Rs 5 crore
Life insurance contracts
According to the Union Budget 2023, under the new tax regime, the amount obtained from life insurance policies will be taxable if the annual premium paid is more than Rs 5 lakh per year.
E-insurance
The Insurance Regulatory and Development Authority of India (IRDAI) previously announced that digitalization of insurance policies will become mandatory from April 1, 2024. This mandate will apply to all categories of insurance, including l life insurance, health insurance and general insurance, requiring policies to be issued. electronically.
Small savings plans
Interest rates on various small savings schemes will remain unchanged for the quarter starting April 1, 2024.
Deposits under the Sukanya Samriddhi scheme will attract an interest rate of 8.2 per cent, while the rate for a three-year term deposit remains at 7.1 per cent.
The interest rates of the popular Public Provident Fund (PPF) and Postal Savings Deposit Scheme were also kept at 7.1 percent and 4 percent, respectively.
The interest rate on the Kisan Vikas Patra will be 7.5 percent and the investments will mature in 115 months.
The National Savings Certificate (NSC) interest rate will remain at 7.7 percent for the period April-June 2024. Like the current quarter, the Monthly Income Scheme (MIS) will yield 7.4 percent to investors .
National Pension System (NPS)
The Pension Fund Regulatory and Development Authority (PFRDA) has introduced a two-factor authentication measure to improve security. Aadhaar-based two-factor authentication will be mandatory for all password logins to the ARC system.
EPFO
The Employees’ Provident Fund Organization will now automatically transfer a subscriber’s balance to their new organization when they change jobs. EPFO account holders do not need to apply for transfer of PF amount.
Revises retail prices for 65 formulations
According to the Department of Pharmaceuticals, the revised ceiling rates are expected to come into effect from April 1. The formulations in the revised rate list include essential medicines such as painkillers, antivirals, antibiotics, antimalarials and type 2 diabetes medicines.
The revision in ceiling and retail prices comes after the National Pharmaceutical Pricing Authority (NPPA) announced an increase of 0.00551 percent in the prices of medicines included in the National List of Essential Medicines (NLEM), on the basis for changes in the Wholesale Price Index (WPI). .
With these changes, manufacturers can now increase the maximum retail price (MRP) of scheduled formulations based on WPI, without the need for prior approval from the government in this regard.
QUICK Tag
It is mandatory to fill the Know Your Customer (KYC) form for the car’s FASTag with the bank before March 31 to avoid deactivation by banks. Without the KYC process, payment will not be made. The National Highways Authority of India (NHAI) has advised FASTag users to comply with Reserve Bank of India (RBI) rules to facilitate toll tax transactions at toll plazas.
Mutual fund
Without KYC, investors are not allowed to transact in mutual funds from April 1. These transactions include systematic investment plans (SIPs), systematic withdrawal plans (SWPs) and redemptions. KYCs carried out based on evidence such as bank statements and utility bills will no longer be valid after March 31. Officially valid documents now include Aadhaar ID, passport and voter ID card, among others.
Emails have been sent by Registrar and Transfer Agents (RTA), CAMS (Computer Age Management Services) and KFin Technologies (KFintech) to mutual fund distributors for mutual fund investors to redo their KYC by March 31.
Credit and debit card
Effective April 1, 2024, SBI Card will implement changes to its rewards points policy, notably affecting the accumulation of points on rental payments. This review will impact a range of its credit cards, including AURUM, SBI Card Elite and SimplyCLICK SBI Card, among others.
Starting April 1, 2024, SBI will increase annual maintenance fees by Rs 75 for select debit cards, as detailed on its website.
First publication: March 31, 2024 | 8:08 p.m. STI