Major Economic Reforms: Tax-Free Income Up to ₹12 Lakh & Other Key Changes Effective from April 1

From tax exemptions to revised banking norms and LPG price cuts, these updates aim to ease financial burdens and improve economic conditions. Here’s a detailed look at the five major reforms taking effect from today.

1. Income Tax Exemption Raised to ₹12 Lakh

Major Economic Reforms:One of the most significant announcements in Budget 2025 was the revision of income tax slabs. As per the new framework, individuals earning up to ₹12 lakh annually will now be exempt from paying income tax. Additionally, salaried professionals can avail of a standard deduction of ₹75,000, effectively making incomes up to ₹12.75 lakh tax-free. However, this benefit is only applicable to those opting for the new tax regime. This reform is expected to provide substantial relief to the middle class, encouraging higher savings and disposable income.

2. Reduction in LPG Cylinder Prices

Households and businesses alike will benefit from the reduction in LPG cylinder prices. Oil and gas marketing companies have slashed the prices of commercial LPG cylinders, making them more affordable. For instance, in Delhi, the price of a 19 kg commercial gas cylinder has been reduced by ₹41, while Kolkata has seen a price drop of ₹44.50. However, the price of 14 kg domestic cylinders remains unchanged.

3. Updates in TDS Regulations

Changes in Tax Deducted at Source (TDS) rules have been implemented to ease financial burdens on taxpayers. Key modifications include:

• The exemption limit on interest income for senior citizens has been doubled to ₹1 lakh, ensuring better financial security for retirees.
• The rental income exemption limit has been increased to ₹6 lakh per year, reducing tax liabilities for landlords and stimulating the rental market.

These changes aim to streamline tax deductions and improve cash flow for individuals and businesses alike.

4. Introduction of the Unified Pension Scheme (UPS)

From April 1, the government has introduced the Unified Pension Scheme (UPS) for central government employees, providing a guaranteed pension plan. Employees can opt for UPS by filling out the necessary claim forms, or they can continue with the National Pension System (NPS). This initiative affects approximately 23 lakh employees and includes an additional government contribution of 8.5% of the basic salary plus dearness allowance for those who choose UPS. The minimum pension under this scheme will be ₹10,000 per month, ensuring financial stability post-retirement.

5. Revised Bank Account Regulations

Leading banks such as the State Bank of India (SBI) and Punjab National Bank (PNB) have updated their rules regarding the minimum balance required in savings accounts. Customers will now need to maintain a revised minimum balance, varying across different account categories. Failure to meet this requirement may result in penalty charges. These changes aim to streamline banking operations and ensure financial discipline among account holders.

Other Notable Changes

Apart from these five major reforms, additional policy adjustments are coming into effect, including:

• Hike in Car Prices: Several automobile manufacturers, including Maruti Suzuki (4% increase), Tata Motors, Kia (3% increase), Hyundai (3% increase), Mahindra (3% increase), and Renault (2% increase), have announced price hikes due to rising raw material costs.
• Increase in Toll Charges: Toll rates on various highways are set to increase, impacting daily commuters and transport businesses.

These regulatory updates signal a shift in the country’s economic landscape, offering both relief and new financial responsibilities for citizens. As these changes take effect, individuals and businesses should stay informed and adjust their financial planning accordingly.