Soumya Prakash Pradhan

Today is April 1, and the new financial year has started in India. Several changes in financial regulations are taking effect today.

Let's explore eight new rules that are coming into effect today:

  • As per the Ministry of Finance, the new tax system becomes the default option in India. This means unless you specifically choose the old tax system, your taxes will be calculated automatically under the new rules. 

  • Another rule is that the standard deduction of Rs. 50,000 from salary and Rs. 15,000 from family pension is not available under the old regime.
  • From this new financial year, the Employees' Provident Fund Organisation (EPFO) has implemented an automatic transfer system for your provident fund balance, eliminating the need for manual transfer requests when changing jobs.
  • Starting April 1, 2024, the PFRDA will implement an additional security measure for the National Pension System, requiring a two-factor Aadhaar-based authentication for accessing the CRA system via password.
  • Ensure your FASTag KYC is completed by March 31st to avoid deactivation by banks. Without KYC, payments won't work, leading to potential double toll charges at toll plazas.
  • The leave encashment tax exemption limit for non-government employees has increased from Rs. 3 lakh in 2022 to Rs. 25 lakh.
  • As per income tax regulations, businesses are disallowed from claiming tax deductions for payments to MSMEs beyond 45 days for the supply of goods and services. This rule takes effect on April 1, as stated in Section 43B(h). Failure to pay on time results in higher taxes for larger companies under the new income tax rules.