• Notification Date: 02-04-2024
• Notification No: N/A

New Changes from April 1: New Tax Regime, NPS, Credit Cards, Insurance Policies

April 1 is the commencement of a fresh financial year FY2024-25. This date also marks the implementation point for proposals set forth by the Union Budget concerning income tax. It is pertinent to acknowledge that each fiscal year operates from April 1 and culminates on March 31 of the ensuing year. 

Corresponding with this new fiscal year effective from April 1, several modifications on governance rules related to NPS, EPFO, taxation and FASTag among other fiscal matters will be constituted. A comprehensive understanding of these amendments is integral not only towards maximising savings potential but also in ensuring conformity to compliance regulations. 

New Tax Regime: 

The New Tax Regime will be the default tax regime from April 1. This implies that unless individuals explicitly choose to abide by the old tax structure, taxes will be automatically assessed and applied according to this new system.  

The income tax slabs in the new tax regime will remain unchanged for FY 2024-25 (AY 2025-26). No changes have been announced in the interim budget. With respect to these regulations under the renewed scheme of things, any individual earning an income up to Rs 7 lakh annually shall not bear liability for paying taxes. 

NPS: Two-factor Authentication: 

The PFRDA will be adopting an additional security measure for the National Pension System starting April 1, 2024. The enhanced system includes a two-factor Aadhaar-based authentication for password-based CRA system access. The announcement was made through a circular on March 15, 2024. 

The two-factor Aadhaar authentication system will be introduced as an add-on check to validate the genuineness of the fingerprint and further reduce spoofing attempts. It would make Aadhaar-authenticated transactions much more secure and robust. 

As per the PFRDA circular, an Aadhaar-based login authentication will be integrated with the current User ID and Password-based login process, enabling 2-Factor Authentication for accessing the NPS CRA system. 

The PFRDA notification said, “To enhance the security measures in accessing the CRA system and safeguard the interests of subscribers and stakeholders, it has been decided to bring in additional security features through Aadhaar-based authentication for login to the CRA system." 

“The Aadhaar-based login authentication will be integrated with the current user ID and password-based login process so as to make the CRA system accessible through 2 Factor Authentication," the notification added. 

Ola Money Wallet: 

OLA Money announced that it will switch to small PPI (prepaid payment instrument) wallet services. This will have a maximum wallet load restriction of Rs 10,000 per month from April 1. 

New Rule of FASTag: 

From April 1, if you haven't updated the KYC of your car's FASTag with the bank, you may face problems. It is mandatory to complete the KYC process for your FASTag before March 31 to avoid deactivation by banks. Without updated KYC, payments won't go through, leading to double toll tax charges. NHAI advises FASTag users to comply with RBI rules for smooth transactions at toll plazas. 

Credit Card Tweaks: 

SBI Card has notified revisions in its reward points accrual policy. Starting from April 1, 2024, the accumulation of reward points for rental payments will cease across a series of credit cards offered by the institution. Cards substantially impacted include AURUM, SBI Card Elite and SimplyCLICK SBI Card among others. 

ICICI Bank has announced changes to its qualification requisites for the complimentary airport lounge access. Starting April 1, 2024, patrons are required to realise a minimum expenditure threshold of Rs 35,000 in the preceding calendar quarter to be eligible for one free airport lounge visit in the following quarter. This change is applicable across various ICICI Bank credit cards, inclusive of our esteemed Coral Credit Card and MakeMyTrip ICICI Bank Platinum Credit Card amongst others. 

Yes Bank will be planning to update its lounge access benefits for domestic customers starting April 1, 2024. Cardholders must spend at least Rs 10,000 in a given quarter to enjoy lounge access in the following quarter, as per the bank's recent announcement. 

Debit Cards: 

SBI has increased annual maintenance charges by Rs 75 for specific debit cards, effective from April 1, 2024, as stated on their website. 

Mutual Funds: 

From April 1, investors who have not re-done their KYC (know your customer) will be not allowed to do any MF transactions. These would include SIPs (systematic investment plan), SWPs (systematic withdrawal plan) and redemptions. Emails were sent by registrar and transfer agents (RTAs), CAMS (Computer Age Management Services) and KFin Technologies (KFintech) to mutual fund distributors (MFD) that MF investors should re-do their KYC (know your customer) by March 31. The officially valid documents as mentioned in these emails include Aadhaar card, passport, voter ID card, among others. KYC done based on proofs such as bank statements and utility bills will no longer hold valid after this deadline. 

E-insurance to become Mandatory: 

The Insurance Regulatory and Development Authority of India (IRDAI) has earlier said that it will be compulsory to digitise insurance policies starting April 1, 2024. Under this directive, all insurance policies across various categories, including life, health, and general insurance, will be issued electronically. 

Surrender Value for Insurance Policies: 

The Insurance Regulatory and Development Authority of India (IRDAI) has announced the final set of rules on surrender value. From April 1, 2024, the surrender value is expected to remain the same or even lower if policies are surrendered up to a period of within three years. However, if policies are surrendered between the fourth and seventh years, there can be a marginal increase in surrender value. 

A surrender value in insurance is the sum disbursed by the insurer to the policyholder when terminating the policy prematurely.