Budget 2025: Major Financial Changes To Take Place From February 1st ; Everything You Need To Know

The Union Budget 2025 is set to be a monumental event for the country, with Finance Minister Nirmala Sitharaman poised to present it in Parliament tomorrow, February 1st. As we prepare for the big day, several key financial changes are expected to take place, potentially affecting your day-to-day activities and lifestyle. Here's a rundown of what to expect.

Union Budget 2025: Expected Announcements

The common man in India is eagerly awaiting tax reforms and other measures that will bring some relief and simplify their lives. Reports suggest that the Finance Minister may raise the basic exemption limit from Rs 3 lakh to Rs 10 lakh, providing much-needed respite to taxpayers. Moreover, there could be higher deduction limits to accommodate increasing medical expenses, which will help individuals manage their healthcare costs more effectively.

Changes in LPG Prices

Expect the usual revisions in LPG prices starting February 1st, which happen monthly. While the commercial LPG segment has seen fluctuations in recent months, the government's move on LPG prices will be closely watched. Both domestic and commercial variants are expected to undergo significant price adjustments. How oil marketing companies respond to these price changes will likely impact household budgets.

RBI's Monetary Policy Changes

The Reserve Bank of India (RBI) is set to hold its next Monetary Policy Committee (MPC) meeting from February 5-7, 2025. A potential repo rate cut is anticipated, following the steady 6.5% repo rate held in the previous meeting. With inflation easing (dropping to 5.22% in December), the likelihood of a rate cut has increased. Additionally, Shaktikanta Das's tenure as RBI Governor has ended, and Sanjay Malhotra has taken over, bringing in a new leadership dynamic that could influence future decisions. Budget announcements will play a pivotal role in shaping the RBI's stance during the MPC meeting.

New Rules on UPI Transactions

From February 1st, the National Payments Corporation of India (NPCI) will implement a new rule affecting UPI transactions. All transactions containing special characters in their transaction IDs will be rejected. This change is aimed at streamlining UPI transactions and ensuring better compliance with technical specifications. Banks and payment providers will need to comply with these guidelines to prevent transaction failures and ensure smooth payments.

Banking Changes from February 1st

Several banking updates are set to take effect starting February 1st. Kotak Mahindra Bank will revise its banking charges and free transaction limits for Kotak811 savings account holders. The fee for branch-initiated RTGS transactions between Rs 2 lakh and Rs 5 lakh will rise from Rs 20 to Rs 40 per transaction. Additionally, NEFT transactions for amounts up to Rs 2 lakh will incur a fee of Rs 4, up from the previous Rs 2 for transactions under Rs 10,000. Another notable change is the withdrawal limit for non-home branches, which will now be free up to Rs 25,000 per day (up from Rs 10,000 previously).