India’s new financial year starts today. From April 1st several changes that were brought by the government will come into effect. Changes range from the merger of banks to an increase in taxes. Know the five major government regulations and new rules which may affect your life.
- Foreign travel becomes costly From April 1, new TCS norms for foreign travel come into effect which will increase the cost of foreign travel, including study tours, by at least 5 percent. This also makes sending money abroad costlier as any amount greater than ₹ 700,000 if sent abroad will attract tax deducted from source (TCS) at the rate of 5 percent or 10 percent, if PAN/Aadhar is not available.
- BS-VI pollution norm comes in to effect From April 1, only BS-VI standard vehicles can be sold to the retailers. However, there is a huge pile-up of BS-IV vehicles with dealers that includes 7 lakh units of two-wheelers, 12,000 units of commercial vehicles and 15,000 units of passenger vehicles, according to data submitted by the Federation of Automobile Dealers’ Association (FADA) to the Supreme Court.
- New Rules regarding medicines Union Government of India has declared that from April 1, 2020, all medical devices will be treated as drugs under Section 3 of the Drugs and Cosmetics Act. As such all medical devices will be regulated by the government as drugs for quality control and price monitoring.
- The merger of PSU banks The 10 PSU banks that were merged to become four big banks will be effective from the new financial year 2020-21. The four anchor banks will PNB, Canara Bank, Union Bank, and Indian Bank. However, the anchor banks are postponing some part of the implementation and processes due to the lockdown. It is expected that this mega-merger will result in synergy benefits of worth more than ₹ 2,500 crores in the next three years.
- New Income Tax Rules New income tax slabs announced in this year’s budget will be effective from 1 April 2020. However, the old tax slabs will remain in effect, giving a choice to the individual to opt between the two. While the new rules significantly lower the tax rates but also takes away a lot of the deductions that are available in the old system. So which tax regime to choose will vary as per individual needs and situation.