Topic 7: FROM 1ST APRIL 2025 FOR FY2025-26 REGULATORY CHANGES

The tax exemption slab will be raised from ₹7 lakh to ₹12 lakh under the new regime, benefiting middle-class taxpayers

The rebate u/s 87A for taxpayers filing tax returns under the New Tax Regime was increased to Rs. 60,000 from the previous limit of Rs. 25,000. Now the taxpayer can enjoy a tax-free income of up to Rs. 12 Lakhs. This means taxpayers earning income up to Rs. 12 Lakhs will have no tax liability under the new tax regime. The rebate for taxpayers opting for the Old Tax Regime remains the same i.e., Rs. 12,500. The provisions of TDS have significant changes that will be applicable from April 2025. It was proposed to enhance threshold limits for various TDS sections for both individuals and businesses. The threshold for TDS on interest received by senior citizens was increased to Rs 1 lakh from the previous limit of Rs. 50,000. Similarly, the thresholds for rent and commissions were also increased.

The threshold for withholding TCS for overseas remittance through LRS will be increased to Rs. 10 lakhs from the previous limit of Rs. 7 lakhs. Further, there will be no TCS on remittance of educational loans taken from a financial institution. Previously, a TCS of 0.5% was applicable if the remittance exceeded Rs. 7 lakhs. Section 206C(1H) which required sellers to collect TCS on the sale of goods when the sale value exceeded Rs. 50 lakhs has been removed and won't be applicable from 1st April, 2025 onwards. The deadline for filing an Updated Tax Return was extended from 12 months to 48 months (4 years) from the end of the relevant assessment year. This extension was to encourage the taxpayers to disclose any previously undisclosed incomes and pay relevant taxes on the same. The additional tax liability based on the timeline of filing an updated return. Any investor who has not linked their PAN with Aadhaar will have their dividend payouts suspended. Additionally, in such cases, TDS rates will increase, and no credit will be reflected in Form 26AS. The 6% equalisation levy, commonly known as the "Google Tax," has been abolished. This levy, primarily imposed on online advertising services, was removed through an amendment to the Finance Bill 2025 on March 24. The move is expected to ease the tax burden on Indian consumers of digital advertising

GOODS SERVICES TAX

From April 1, 2025, several significant changes are being implemented in the Goods and Services Tax (GST) framework in India. Here are the key changes which would streamline GST compliance, enhance transparency, and simplify tax processes for businesses in India:

• Multi-Factor Authentication (MFA) is mandatory for all GST portal users to enhance security and prevent unauthorized access.
•  Biometric Authentication: GST registration now requires biometric authentication within 15 days to generate the Application Reference Number (ARN).
•  Sequential Invoicing: Businesses must start a new, sequential invoice series from April 1, 2025, to maintain accurate records and ensure compliance.
•  Compulsory ISD: Businesses with multiple GSTINs under the same PAN must obtain ISD registration to distribute Input Tax Credit (ITC) across units, enhancing transparency and compliance.
•  IMS Integration: Recipients of credit notes must accept or reject them through the Integrated Management System (IMS) to prevent ITC mismatches.
• Used Car Sales: The GST rate on used car sales increases from 12% to 18% across all categories, eliminating previous differentiations based on engine size or type.
•  Tax Relief: Businesses that have cleared all tax dues up to March 31, 2025, can apply for a GST waiver under specific schemes within three months.
•  Hotel Industry: The "Declared Tariff" concept is abolished. GST will now be levied on the actual transaction value, with hotels charging above ₹7,500 per day classified as "specified premises" and attracting 18% GST on restaurant services with full ITC benefits.

PENSION SCHEME
From April 1, 2025, the Unified Pension Scheme (UPS) under the National Pension System (NPS) will be implemented for central government employees. The scheme guarantees a pension based on service tenure. Employees with at least 25 years of service will receive 50% of their last 12 months’ average basic salary as a pension. Employees contribute 10% of their basic salary plus dearness allowance (DA). The government's contribution increases from 14% to 18.5%, with an additional 8.5% going into a separate pooled fund. A minimum monthly pension of ₹10,000 is guaranteed for those with at least 10 years of service. The scheme includes gratuity and a lump sum retirement payout. In case of an employee's demise, the family receives 60% of the pension amount.

UNIFIED PAYMENT INTERFACE
NPCI has mandated that banks and payment service providers (PSPs) update their databases before March 31 to remove recycled or churned mobile numbers. Banks and UPI apps must use the Mobile Number Revocation List (MNRL) available on the Digital Intelligence Platform (DIP) to prevent errors and fraud risks. Users must ensure their bank account is linked to an active mobile number before April 1 to avoid disruptions.