April kicks off with Tax Cuts, RBI Rate Cuts & more!

April 2025 is set to bring several financial changes that could impact your wallet. From income tax cuts to possible RBI repo rate reductions, here’s a quick look at what’s changing and how it might affect you.

1. Tax Cuts Under the New Regime

Starting April 1, the tax reductions announced in Budget 2025 come into effect, making the new tax regime even more attractive. The basic exemption threshold is now Rs 4 lakh (up from Rs 3 lakh), and the rebate limit has been increased, making tax savings more significant.

If you earn Rs 12 lakh annually, your tax outgo will reduce by Rs 83,200.

Those earning Rs 16 lakh will save Rs 52,000.

Individuals with Rs 1 crore income will save Rs 1,25,840.

Taxpayers earning Rs 2 crore will see a reduction of Rs 1,31,560.

Under the new regime, those earning up to Rs 12.75 lakh (including standard deductions) will pay no tax. The old tax regime may still be beneficial for those claiming deductions of Rs 8 lakh or more.

2. Will RBI Cut Repo Rates Again?

The RBI had already cut its repo rate by 25 basis points (bps) in February, bringing it down to 6.25%. With inflation at a seven-month low of 3.61%, experts predict another 25-bps cut in April, which could lower home loan EMIs for existing and new borrowers. However, some private banks may not pass on the full benefit.

3. Stricter SEBI Rules for Mutual Funds

From April 1, Asset Management Companies (AMCs) will face stricter rules on deploying funds from New Fund Offers (NFOs):

Funds must be invested within 30 days of allotment.

A one-time extension of 30 days is possible, but only with approval.

If funds aren’t deployed in 60 days, fresh inflows will be halted, and investors can withdraw without exit loads.

4. New Investment Option: Specialised Investment Funds (SIFs)

A new category of investment—Specialised Investment Funds (SIFs)—offers features of both mutual funds and portfolio management services (PMS). With a minimum investment of Rs 10 lakh, SIFs allow up to 25% allocation to derivatives, making them appealing for high-net-worth individuals.

5. DigiLocker to Store Investment Statements

From April 1, investors can store their demat holdings and consolidated account statements (CAS) in DigiLocker. This initiative aims to reduce unclaimed assets and ensure smooth access to financial data for legal heirs.

6. SBI Credit Card Reward Changes

SimplyCLICK SBI Cardholders will now earn 5X reward points on Swiggy (down from 10X).

Air India SBI Platinum and Signature Credit Card holders will see a major cut in rewards for Air India bookings (from 15 and 30 points per Rs 100 to 5 and 10 points, respectively).

7. Axis Bank Vistara Credit Card Updates

With the Vistara-Air India merger, Axis Bank is revising its credit card benefits from April 18:

No annual fees for renewals.

Discontinuation of benefits like Maharaja Club memberships, renewal ticket vouchers, and milestone rewards.

With these changes kicking in, it’s essential to stay informed and adjust your financial plans accordingly!