Income Tax, GST, UPI, Pension Schemes: Key Changes Effective from Today

Ira Singh
Khabar Khabaron Ki,01 April’2025

With the commencement of the new financial year on April 1, 2025, a series of regulatory and financial changes have come into effect, impacting taxpayers, salaried individuals, and consumers nationwide. These include new income tax slabs, the Unified Pension Scheme (UPS), updated UPI security norms, and changes in the GST framework.

Income Tax Reforms
Union Finance Minister Nirmala Sitharaman, in the Union Budget 2025 presented on February 1, announced significant changes to the income tax structure. Both Houses of Parliament—Lok Sabha and Rajya Sabha—approved these revisions as part of the Finance Bill 2025. The revised tax rates apply to income earned from April 1, 2025, to March 31, 2026, and will be reflected in the Income Tax Returns for Financial Year 2025-26 (Assessment Year 2026-27).
Key highlights:
• Increased Tax Exemption Limit: Individuals earning up to Rs 12 lakh annually are now exempt from income tax.
• Standard Deduction Enhancement: Salaried individuals can avail a standard deduction of Rs 75,000, effectively making annual incomes up to Rs 12.75 lakh tax-free.
• Revised Filing Norms: Individuals earning below Rs 4 lakh per annum are not required to file income tax returns.
The due date for filing income tax returns for individuals remains July 31, 2026.

Unified Pension Scheme (UPS)
The Unified Pension Scheme (UPS), aimed at central government employees, has been operationalized from April 1, 2025. Initially announced in August 2024, its implementation was confirmed through a gazette notification by the Pension Fund Regulatory and Development Authority (PFRDA) on March 19, 2025.
• Eligibility: The UPS is available to central government employees who joined service on or after January 1, 2004. They also have the option to continue with the National Pension Scheme (NPS).
• Guaranteed Pension: Employees with a service tenure between 10 and 25 years will receive a minimum guaranteed pension of Rs 10,000 per month.
• Participation Categories: Three groups of central government employees can opt for the UPS:
1. Existing central government employees under NPS as of April 1, 2025.
2. New recruits joining central government services on or after April 1, 2025.
3. Employees covered under NPS who retired on or before March 31, 2025.

UPI Security Enhancements
The National Payments Corporation of India (NPCI) has introduced measures to strengthen the security of digital transactions via the Unified Payments Interface (UPI). Payment apps such as Paytm, PhonePe, and Google Pay must deactivate UPI services linked to inactive mobile numbers to prevent unauthorized transactions. Users are advised to update their mobile numbers with banks to ensure seamless digital transactions.

GST Modifications
Several key changes have been made in the Goods and Services Tax (GST) framework:
• Multi-Factor Authentication: The GST portal now mandates multi-factor authentication for taxpayer login.
• E-Way Bill Validity: E-way bills can only be generated for documents issued within the last 180 days to ensure compliance.
• Hospitality Sector Taxation: Hotels charging more than Rs 7,500 per day are categorized as ‘Specified Premises.’ Restaurant services within such hotels will attract 18% GST but will qualify for input tax credit.

Other Financial Changes
• Banking Regulations: Leading banks, including State Bank of India (SBI), Punjab National Bank (PNB), and Canara Bank, have revised their minimum balance requirements.
• PAN-Aadhaar Linking: Individuals who have not linked their PAN with Aadhaar will face higher TDS rates and will be ineligible to receive dividend payouts on stock market investments.
• Toll Tax Revisions: The National Highways Authority of India (NHAI) has increased toll taxes by Rs 5 to Rs 25, primarily affecting northern and eastern national highways.