With the dawn of a new financial year, a number of money-related changes are set to take place ranging from taxation to FASTag and security and investment instruments like insurance and national pension system (NPS). In this issue of DH Deciphers, Gyanendra Keshri decodes these changes and their impact on your savings and investments.
The new tax regime, which was introduced in FY 2020-21 as an optional alternative to the pre-existing tax system, will become a default option from April 1, 2024. This means your taxes will be automatically assessed and applied as per this new tax system, unless you specifically opt for the old tax structure.
If you want to be assessed under the old tax structure, you will have to specifically indicate this preference at the beginning of the year. A salaried taxpayer has the option to switch between the old tax regime and the new tax regime every financial year. However, a taxpayer with income from business and profession can change only once. This means, if a taxpayer with income from business and profession opts for the new tax regime, he/she will have only one chance to return back to the old tax system. Moreover, this option of choosing between the old and new tax regime is applicable only if the tax return is filed within the due date. After the due date there is no option, you will have to go for the default system which is the new tax regime.
Starting from April 1, 2024 all insurance policies, including those for life, health, and general insurance, have to be issued electronically. This means now all the insurance policies will be in digital format. The Insurance Regulatory and Development Authority of India (IRDAI) issued a notification in this regard on March 20. “Irrespective of whether the proposal is received in electronic form or otherwise, every insurer shall issue insurance policies only in the electronic form,” the IRDAI said in the notification. Like a demat account for holding shares, you will now have a dedicated account for holding your insurance policies. Such an account will be called e-Insurance Account.
Two-factor Aadhaar-based authentication will become mandatory for logging into a National Pension System (NPS) account. As per a circular issued by the Pension Fund Regulatory and Development Authority (PFRDA), an Aadhaar-based login authentication will be integrated with the current user ID and password-based login process to make the NPS central record-keeping agency (CRA) system accessible through two-factor authentication. This additional layer of safeguard will reduce the risk of unauthorised access to the CRA system.
The National Highways Authority of India (NHAI) has asked vehicle owners to complete their FASTag know your customer (KYC) process before April 1. If you fail to do this, your FASTag may get deactivated or blacklisted. This means even if there is balance in your FASTag you will not be able to make a toll payment through it. According to NHAI, FASTag users will have to follow the ‘one Vehicle, One FASTag’ policy and return all previously issued FASTags to their respective banks. Now only new FASTag accounts will remain active. Vehicle owners are required to complete the KYC process for FASTag as per the rules of the Reserve Bank of India (RBI).