EPFO's new regulation effective from April 1

PTC News Desk: As April 1 marks the commencement of a new financial year in India, it holds significant implications for individual finances. This date heralds the implementation of numerous new tax regulations announced in the budget by Finance Minister Nirmala Sitharaman. Additionally, other changes affecting savings plans such as the National Pension System (NPS), taxes, FASTags, and various financial aspects are also likely to take effect.

Being cognizant of these alterations is essential for managing finances effectively, as it can aid in maximising savings and avoiding potential compliance issues. Therefore, it is advisable to familiarise oneself with these updates to stay financially informed and prepared.

Enhanced EPFO regulation streamlines job transitions

Transitioning between jobs has become more financially convenient with the implementation of a new rule by the Employees' Provident Fund Organisation (EPFO). Introducing an automatic transfer system for provident fund balances, this initiative eliminates the need for manual transfer requests when switching employers.

With this system in place, EPFO will seamlessly transfer your PF balance to your new employer's account without the need for any intervention from you. This development marks a significant advancement in employee portability, streamlining the process of managing your PF across different employment engagements.

Revised taxation system 

Commencing April 1, 2024, India adopts a new default tax regime. Under this system, unless you opt specifically for the old tax structure, your taxes will be automatically calculated according to the updated regulations.

The positive aspect of this transition is that the tax brackets for the new system remain unchanged for the financial year 2024-25 (tax year 2025-26). Notably, there have been no alterations announced in the recent budget. Furthermore, individuals with an annual income of Rs 7 lakh or less will be exempt from income tax under the new system—a favourable development for many taxpayers.

NPS enhances security with two-factor authentication

Effective April 1, the Pension Fund Regulatory and Development Authority (PFRDA) is set to introduce an additional layer of security for the National Pension System (NPS). This upgrade entails the implementation of a two-factor Aadhaar-based authentication method for accessing the Central Recordkeeping Agency (CRA) system alongside the existing password protocol. The announcement of this advancement was disseminated via a circular issued on March 15.

The incorporation of the two-factor Aadhaar authentication mechanism is designed to bolster security measures by validating fingerprints and minimising the risk of spoofing attempts, thereby fortifying the integrity of Aadhaar-authenticated transactions. As per the PFRDA circular, the Aadhaar-based login authentication will seamlessly integrate with the prevailing User ID and Password-based login process, enabling a robust two-factor authentication framework for accessing the NPS CRA system.

The notification from PFRDA emphasises, "In order to strengthen security measures for accessing the CRA system and safeguard the interests of subscribers and stakeholders, additional security features will be introduced through Aadhaar-based authentication for login to the CRA system.

Furthermore, the notification underscores, "The Aadhaar-based login authentication will be seamlessly integrated with the current user ID and password-based login process to facilitate access to the CRA system through a two-factor authentication mechanism."

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Important update regarding FASTag

Dear FASTag Users, We urge your attention to an essential update to avoid any inconvenience at toll booths. Please ensure your FASTag KYC (Know Your Customer) process is completed by March 31. Failure to update your KYC details may result in the deactivation of your FASTag by banks. Without proper KYC, your FASTag payments will not be functional, potentially leading to double toll charges. To prevent any such issues, kindly adhere to NHAI's guidelines for a seamless experience at toll plazas. Thank you for your cooperation.

Revised tax exemption for enhanced leave encashment

The tax exemption limit for leave encashment for non-government employees, which stood at Rs 3 lakh in 2022, has now been significantly raised to Rs 25 lakh.

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(Inputs from agencies)

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