Are you aware of these 7 important changes in the financial ecosystem happening from 1 April 2023?

First, the Union Budget 2023 proposed new changes in the tax regime beginning from the next financial year, i.e., 1st April 2023. Then, the government issued new financial rules effective for the new financial year. All in all, major changes are happening in the financial ecosystem from the new financial year.

So, here’s a look at 7 such changes that you need to know about –

1. Union Budget changes

Per the announcements in the Union Budget 2023, there have been multiple changes in the new tax regime. These changes would come into effect from 1st April 2023 and include the following:

• New tax regime to become the default
• Rebate limit enhanced to Rs.7 lakhs.
• Reduces tax slabs with new threshold limits
• Allowance of standard deduction of Rs.50,000 for salaried employees

Besides the new tax regime, other tax-related changes include the following:

• The encashment limit of Leave Travel Allowance increased to Rs.25 lakhs.
• Maturity proceeds of traditional life insurance plans would be taxed if the aggregate premium was more than Rs.5 lakhs.
• Market-linked debentures would fall under the short-term assets category.
• Conversion of physical gold into electronic format or vice versa would not attract any tax

2. Debt mutual funds and LTCG

Starting from 1st April, long-term capital gains earned from debt mutual funds would be taxed at your slab rates. Plus, the indexation benefit would be revoked.

Also Read - How indexation helped you save tax.

3. Investment limits

The maximum investment limit for Senior Citizen Savings Scheme (SCSS) and Post Office Monthly Income Scheme (POMIS) has increased. For SCSS, the limit has doubled to Rs.30 lakhs from the previous Rs.15 lakhs. For POMIS, the investment limit under individual accounts has been doubled to Rs.9 lakhs and for joint accounts, it has increased to Rs.15 lakhs.

4. NPS documents

To speed up annuity payments and withdrawals, the Pension Fund Regulatory and Development Authority (PFRDA) has mandated some documents from subscribers. Investors would have to upload the following documents on the Central Record-keeping Agency platform –

• Forms for NPS withdrawal or exit
• Identity proof
• Address proof
• Bank account proof
• Permanent Retirement Account Number (PRAN) Card

5. Repo rate hike

While the repo rate increased to 6.50% in 2022-23. This year too, as the monetary committee meets again on 6th April 2023, the repo rate might be hiked further.

6. Sale of hallmarked gold jewellery

Starting from April. Gold jewellery that carries a valid HUID (Hallmark Unique Identification Number) number can only be sold across stores. The HUID is a six-digit alphanumeric number that is unique so that the buyer can get the correct valuation of the gold.

7. Savings account tariff revision

Axis Bank has changed the fees and charge structure of its salary and savings bank accounts. The tariff changes would be applicable from 1st April 2023 and are important for Axis Bank customers.

So, know these important changes when making investments and managing your financial portfolio. This would help you choose the right investment avenues and also maximise tax savings.

Also Read - Here are the key highlights of the Union Budget 2023