As the commencement of the new financial year approaches, it is imperative to be cognizant of a host of pertinent updates in the realm of finance. Changes encompassing taxation, FASTag, security, and investment schemes, such as insurance and the national pension system (NPS), will have implications on savings and investments. This article aims to unravel these developments and their potential impact on personal finances.
Commencing April 1, 2024, the new tax regime, originally introduced in FY 2020-21 as an alternative option to the preceding tax system, will become the default choice. Consequently, taxes will be automatically evaluated and applied in accordance with the new tax system, unless a deliberate choice is made to persist with the old tax structure.
Opting to be assessed under the former tax structure necessitates an explicit declaration at the outset of the fiscal year. While salaried taxpayers possess the liberty to fluctuate between the old and new tax regimes annually, those with income from business and profession are permitted a single transition. Furthermore, the freedom to elect between the old and new tax regime is contingent upon the punctual filing of tax returns. After the stipulated date, the new tax regime becomes the default, precluding subsequent alterations.
Effective April 1, 2024, all insurance policies, encompassing life, health, and general insurance, must be exclusively issued in electronic format. The Insurance Regulatory and Development Authority of India (IRDAI) mandated this transition through a notification on March 20, necessitating insurers to exclusively dispense digital insurance policies. This will facilitate policyholders with a dedicated e-Insurance Account, similar to a demat account for holding shares.
Mandatory Aadhaar-based two-factor authentication for accessing a National Pension System (NPS) account is another significant update. The Pension Fund Regulatory and Development Authority (PFRDA) issued a circular advocating the integration of Aadhaar-based login authentication with the existing user ID and password-based system, bolstering the security of the NPS central record-keeping agency (CRA).
The National Highways Authority of India (NHAI) has underscored the imperative for vehicle owners to complete their FASTag know your customer (KYC) process before April 1 to circumvent deactivation or blacklisting of their FASTags. Failure to adhere entails an inability to make toll payments despite holding a balance in the FASTag. NHAI also emphasized adherence to the ‘one Vehicle, One FASTag’ policy and the return of previously issued FASTags to respective banks, with sole compliance preserving the activity of new FASTag accounts.
Conclusively, these modifications will impact multifaceted aspects of individual finances commencing April 1, 2024. It is incumbent upon individuals to stay abreast of information and ensure adherence to novel regulations, precluding potential financial inconveniences across the spectrum of taxes, insurance policies, NPS accounts, and FASTags.