Many rules of banking and income tax in India are going to change from 1 April 2025. These changes will directly affect the financial transactions of the general public. In particular, new rules will be applicable in areas such as money deposits, fixed deposits (FD), and digital transactions in the bank. The main objective of these changes is to promote financial transparency and prevent tax evasion. If you are unaware of these rules, then you may face unnecessary tax notice. Therefore, it is very important to understand these rules and plan your financial transactions according to them.
In this article, we will know in detail what big changes are happening since 1 April 2025, what will be the impact on your banking experience, and what precautions should be taken to avoid income tax notice.
Major changes in banking rules from april 2025
| Topic | Description |
| Minimum balance rule | Separate minimum balance limits for urban, semi-urban and rural areas will be applicable. |
| Check payment security | Positive pay systems will be mandatory for checks of more than ₹ 50,000. |
| Fixed Deposit (FD) limit | The TDS exemption limit on FD has been increased to ₹ 50,000. |
| Digital transaction limit | The new limit will be implemented on UPI and other digital payments. |
| Rules to send foreign money | Sending up to ₹ 10 lakh for education and medical expenses will not take TDS. |
| ATM withdrawal fee | The possibility of an increase in ATM withdrawal fees. |
Income Tax Notice: What are the new rules?
From 1 April 2025, the Income Tax Department will get more strict on banking transactions. If you cross the following limits, you can get Income Tax Notice:
- Cash deposit/withdrawal: More than ₹ 10 lakh deposit or withdrawal in a financial year in savings account.
- Fixed Deposit: TDS will be deducted if FD has more than ₹ 50,000 interest income.
- Digital transactions: Reporting will be mandatory on transferring large amounts through UPI or other digital means.
Minimum balance rule
From 1 April 2025, the rules for holding minimum balance will be strict.
- Urban Area: A minimum balance of up to ₹ 10,000 has to be kept.
- Semi-urban Area: A limit of up to ₹ 5,000 will be fixed.
- Rural Area: A minimum balance of up to ₹ 2,000 will have to be kept.
If you do not complete this limit, you may have to pay an additional fee.
Positive Pay System: Check Payment Security
Positive pay system (PPS) has now been made mandatory:
- On issuing checks of ₹ 50,000 or more, the check will have to be given to the bank first.
- This system has been applied to prevent fraud and increase transparency.
FD (Fixed Deposit) and TDS discount
New limit of TDS deduction on fixed deposits:
- The TDS exemption limit for ordinary citizens has been increased from ₹ 40,000 to ₹ 50,000.
- This limit has been increased to ₹ 1 lakh for senior citizens.
If your interest income exceeds these limits, the bank will cut TDS.
Atm withdrawal charges
ATM withdrawal fees will be changed from 1 April 2025:
- Additional fees will have to be paid for crossing the free withdrawal limit in a month.
- This fee may vary depending on the bank and the location (urban/rural).
Digital transaction limit
New boundaries will apply to promote digital transactions:
- Reporting of UPI transaction will be mandatory if the total amount exceeds ₹ 2 lakh in a month.
- On transferring large amounts, information will be given by the bank to Income Tax Department.
Rules to send foreign money
RBI has made the following changes under Liberalized Remittance Scheme (LRS):
- Sending up to ₹ 10 lakh for education and medical expenses will not take any TDS.
- In other cases, 5% TDS will be applied for sending up to ₹ 7 lakh.
What precautions to take?
Take the following precautions to avoid Income Tax Notice:
- Keep a record of all your banking transactions.
- Follow cash deposits and withdrawal boundaries.
- Report FD interest income correctly.
- Take care of new boundaries while doing digital transactions.
Disclaimer
This article is written only for the purpose of giving information. It is necessary to confirm the official notification or guidelines issued by the government. The above information is based on real events and use it sensibly.
Conclusion: These rules, which come into force from 1 April 2025, will affect your financial decisions. Therefore, understand these changes in time and make your plan according to them so that any kind of trouble or tax notice can be avoided.
