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Understanding these changes can help you save more
April 1 marks the start of a new financial year in India. This is important for your pocket because most of the new tax rules announced by Finance Minister Nirmala Sitharaman in the Budget come into effect on this day. There may also be other changes that affect your finances, so it’s a good idea to be aware of them.
The new fiscal year brings updates to the rules for your savings plans (NPS & EPFO), taxes, FASTags and other financial matters. Understanding these changes can help you save more and avoid rule-breaking headaches. It’s worth taking some time to learn more about it.
New EPFO rule
Changing jobs has become even easier on your finances. The Employees’ Provident Fund Organization (EPFO) has implemented an automatic transfer system for your provident fund balance. This means you no longer have to manually request a transfer when you start a new position. EPFO automatically credits your PF balance to your new employer’s account, ensuring seamless continuation of your retirement savings. This is a big win for employee portability and simplifies the process of managing your PF across employers.
New tax regime
From April 1, 2024, the new tax system will become the default option in India. This means that unless you specifically opt for the old tax system, your taxes will automatically be calculated according to the new rules.
The good news: The tax bands for the new system remain the same for the 2024-25 financial year (2025-26 tax year). No changes were announced in the recent budget. In fact, if your annual income is Rs 7 lakh or less, you will not pay any income tax under the new system!
NPS: two-factor authentication
From April 1, 2024, the PFRDA will implement an additional security measure for the National Pension System. This enhanced system includes Aadhaar-based two-factor authentication to access the CRA system via a password. The announcement of this upgrade was made via a circular on March 15, 2024.
The introduction of the two-factor Aadhaar authentication system aims to provide an additional layer of security to authenticate fingerprints and reduce spoofing attempts, thereby improving the security of Aadhaar-authenticated transactions.
According to the PFRDA circular, the Aadhaar-based login authentication will be integrated with the existing user ID and password-based login procedure, facilitating two-factor authentication for accessing the NPS CRA system.
The PFRDA notification states: “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.
“The Aadhaar-based login authentication will be integrated with the current user ID and password-based login process to make the CRA system accessible through 2-factor authentication,” the notification said.
New rule from FasTag
Attention FASTag users! Avoid hassle with toll booths! Get your FASTag KYC ready before March 31. After that, banks can deactivate your FASTag if it is not updated. Without KYC, payments will not work and you may pay double toll charges. Follow NHAI guidelines to ensure smooth sailing at toll plazas.
Exemption from enhanced leave collection
The tax exemption limit for leave for non-government employees was Rs 3 lakh in 2022 and has now been increased to Rs 25 lakh.
