From April 1, 2021, the Financial Year 2021-22 will begin. There are some big changes coming up next month that will have a huge effect on your financial situation. Changes in the price of LPG cylinders, a new pay system starting in April 2021, an increase in NPS fund manager’s fees, banking regulations due to bank mergers, income tax law changes in terms of EPF investment, and so on are just a few of the issues.
- LPG Cylinder price
The price of LPG cylinders is declared by the central government on the first of every month. LPG prices in New Delhi were raised from Rs 769 per cylinder to Rs 819 per cylinder in March 2021. Since global petroleum prices are expected to rise in the coming month, the price of LPG cooking gas will rise further on April 1, 2021.
- Salary structure for April 1
The Narendra Modi government is scheduled to enact the New Wage Code Bill in the next fiscal year, FY 2021-22. If the current wage bill is introduced, it would have a huge effect on one’s take-home pay since it contains a clause to reduce allowance by 50%. To put it another way, under the new wage code, one’s minimum salary must equal at least 50% of one’s net CTC. Once the minimum salary is increased, one’s PF contribution and gratuity contribution would also increase, resulting in a small decrease in one’s take-home pay once the new wage code bill is introduced. However, since the PF and Gratuity contributions will increase under the new wage structure beginning in FY 2021-22, a lower take-home salary will result in a higher retirement fund accumulation.
- NPS Fund Managers to charge more
From April 1, the Pension Fund Regulatory and Development Authority (PFRDA) will authorise pension fund managers (PFMs) to charge higher fees to their customers. Many PFMs would become profitable as a result of the fee increase. PFMs were required to work with exceptionally low costs due to the old fee limit of 0.01 percent of assets under management (AUM). Most would be able to turn a profit under the new cap.
- Bank credentials of 7 public sector banks
Your passbook and cheque book will become non-functional on April 1, 2021, if you have a bank account with any of these seven public sector banks: Dena Bank, Vijaya Bank, Corporation Bank, Andhra Bank, Oriental Bank of Commerce, United Bank of India, and Allahabad Bank. This will occur as a result of the merger of these banks with other banks. Dena Bank and Vijaya Bank were merged with Bank of Baroda, Oriental Bank of Commerce and United Bank of India with Punjab National Bank (PNB), and Corporation Bank and Andhra Bank with Union Bank of India.
- Income Tax rule on EPF
From 1st April 2021, one’s investment in EPF account is no more free from the income tax. From 1s April 2021, one’s investment in EPF above Rs 2.5 lakh in a financial year is taxed. One’s EPF interest on EPF investment above Rs 2.5 lakh in a particular year is taxable.
- Income Tax rule on TDS
TDS (Tax Deducted at Source) income tax laws will adjust on April 1, 2021, which is only a few days away. Sitharaman said in her budget speech that if an individual does not file an income tax return (ITR), the TDS rate on bank deposits would double. That means that even if a person does not fall into an income tax bracket, the TDS rate would be doubled.
- LTC cash voucher Scheme
The exemption of the Leave Travel Concession or LTC cash voucher scheme in lieu of a leave travel concession was declared by the central government (LTC). An employee may claim an LTC allowance exemption against the purchasing of listed products or services under this scheme. This scheme is only valid until March 31, 2021, which means money must be invested by that date to qualify.