Understanding these changes can help you save more
April 1 is the beginning of India’s new fiscal year. This is important for your wallet as most of the new tax rules announced by Finance Minister Nirmala Sitharaman in the Budget will come into effect on this day. There may be other changes that affect your financial situation, so it’s a good idea to be aware of them.
The rules for your savings plans (NPS and EPFO), taxes, FASTag and other financial matters have been updated for the new financial year. Understanding these changes can help you save more and avoid any trouble with breaking the rules. It’s worth spending some time getting to know them.
New EPFO rules
Changing jobs becomes easier on your finances. The Employees Provident Fund Organization (EPFO) has implemented an auto-payment system for your provident fund balance. This means you no longer need to manually request a transfer when you start a new position. EPFO will automatically credit your PF balance to your new employer’s account, ensuring a seamless continuation of your retirement savings. This is a huge win for employee portability and simplifies the process of managing PF between different employers.
new tax system
The new tax regime will become the default option in India from April 1, 2024. This means that unless you specifically elect the old tax system, your taxes will be calculated automatically based on the new rules.
The good news: Tax brackets under the new system remain unchanged for the 2024-25 fiscal year (2025-26 tax year). No changes were announced in the recent budget. Even better, if your annual income is Rs 7 lakh or less, you won’t have to pay any income tax under the new regime!
NPS: Two-factor authentication
From April 1, 2024, PFRDA will implement additional security measures for the National Pension System. The enhanced system involves Aadhaar-based two-factor authentication for password access to the CRA system. This upgrade announcement was released in the form of a notice on March 15, 2024.
The purpose of introducing the two-factor Aadhaar authentication system is to provide an additional layer of security to verify fingerprints and reduce spoofing attempts, thus enhancing the security of Aadhaar authentication transactions.
According to the PFRDA notification, Aadhaar-based login authentication will be integrated with the existing user ID and password-based login procedure to facilitate two-factor authentication for accessing the NPS CRA system.
The PFRDA notification stated, “In order to strengthen security measures for accessing the CRA system and protect the interests of subscribers and stakeholders, additional security features will be implemented through Aadhaar-based authentication for logging into the CRA system.
“Aadhaar-based login authentication will be integrated with the current user ID and password-based login process to enable access to the CRA system through two-factor authentication,” the notification added.
FasTag new rules
Attention FASTag users! Avoid the hassle of toll booths! Complete FASTag KYC before March 31st. After this, if your FASTag is not updated, the bank may deactivate your FASTag. Without KYC, payments will not go through and you may end up paying double the toll. Follow the guidelines of NHAI to ensure smooth navigation at toll plazas.
Enhanced leave encashment exemption
The tax exemption limit for leave encashment for non-government employees was Rs 3 lakh in 2022, which has now been increased to Rs 25 lakh.
