New Financial Year: New Tax regime, TDS, UPI & more - 6 major financial changes affecting your money from April 2025

As the new financial year starts on April 1, 2025, several regulatory changes will be in effect that will influence many aspects of personal finance. It is important to follow those changes and ensure compliance with future planning. 

1. Modifications in Tax Regime: The tax regime for the Assessment Year 2025-26 will be the new tax regime as the default regime. However, taxpayers can still choose to use the old regime, but they must state that they are going to use the old regime when they file their taxes. “The old regime allows for the taxpayer to take deductions from taxable income under Section 80C, so if you are planning on taking those deductions, then be sure to choose the appropriate regime and plan your investments accordingly,” said CA Manish Mishra, Founder of GenZCFO. 

CA (Dr.) Suresh Surana, said, "The Finance Act 2025 has made the vital changes in the income tax slabs and rates for the benefit of the middle class. The changes to the slabs and rates pertain to the new tax regime." The revised tax slabs and rates are as mentioned in the table below:

"While the Finance Act 2024 has retained the slab structure for the old tax regime, it has restructured income tax slabs under the new tax regime to provide relief, especially for the middle class. The basic exemption limit has been raised from Rs 3 lakhs to Rs 4 lakh, in the new tax regime. Tax rates now progress more gradually, with 5% applicable up to Rs 8 lakh, followed by 10% for Rs 8-12 lakh, and higher slabs increasing proportionally," said Surana.

A key benefit is that the 30% tax rate now applies only for income above Rs 24 lakh, compared to Rs 10 lakh in the old regime. These revisions aim to reduce tax burdens and encourage taxpayers to opt for the new regime.

2. Modifications to TDS RegulationsThe Finance Bill 2025 presents increased limits for Tax Deducted at Source (TDS) for typical financial undertakingsInterest on Deposits:

No TDS up to ₹50,000 for ordinary citizens and ₹1 lakh for senior citizens, revised from ₹40,000 and ₹50,000, respectivelyRental Payments:

TDS exemption elevated from ₹2.4 lakh annually to ₹6 lakh.

Remittances Abroad: No TDS for currency remittances up to ₹10 lakh; remittance limit increased from ₹7 lakh. 

3. Deactivation of UPI IDs for Inactive AccountsThe National Payments Corporation of India (NPCI) will deactivate UPI IDs that haven't been used in over a year to prevent fraud and phishing scams. “User should maintain consistent activity in their UPI accounts or reactivate dormant UPI IDs to maintain uninterrupted digital payment services,” said Mishra. 

4. PAN-Aadhaar Linking DeadlineIndividuals who have yet to link their Permanent Account Number (PAN) with Aadhaar will face consequences from April 1, 2025. Mishra says, “If individuals do not comply, they will face higher TDS on dividends and capital gains and delays in refunds.” Taxpayers should complete the linking process as soon as possible to avoid these issues. 

5. Import Duty Relief for Manufacturing of EVs and Mobile PhonesThe government has waived import taxes on goods used to make electric vehicle (EV) batteries and mobile devices that would stimulate domestic manufacturing and enhance competitiveness for exports. It is expected to improve the price of locally produced goods and support domestic producers. 

6. Termination of Gold Deposit ProgramsThe government has discontinued most of the medium-term (5-7 years) and long-term (12-15 years) gold deposit schemes under the Gold Monetisation Programme, but banks can still conduct shorter-term gold deposit schemes if it is commercially viable. “The intention is to reduce future government liabilities and reduce exposure to fluctuating gold prices.,” says Mishra. 

The start of the 2025-26 financial year sets in motion a raft of changes, some of which may affect your financial planning and expenditure on a day-to-day basis. Therefore, it is wise to stay updated so that you can prepare for changes that may need to happen and for improvements in your financial well-being.