- January 31, 2025
Budget 2025, New UPI Rule: Big Financial Changes In February You Should Know – News18
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On February 1, Finance Minister Nirmala Sitharaman will present a record eighth consecutive budget for the financial year 2025-26.
Representative image of Rs 500 currency notes | PTI
This February, several financial changes are set to take effect, including the announcement of the Union Budget 2025, new rules for UPI transaction IDs, and a monetary policy review by the newly appointed RBI Governor, Sanjay Malhotra.
On February 1, Finance Minister Nirmala Sitharaman will present a record eighth consecutive budget for the financial year 2025-26. It will likely include measures to boost economic growth and relieve the middle class facing high prices and stagnant wages.
In the first week of February, the Reserve Bank of India will hold its next Monetary Policy Committee (MPC) meeting, while the National Payments Corporation of India (NPCI) has issued a circular announcing a major change to the Unified Payments Interface (UPI).
Let’s take a closer look at the expected financial changes in February 2025:
Union Budget 2025
Finance Minister Nirmala Sitharaman is expected to tweak the income tax slabs to provide relief to the middle class. Experts suggest that the government may raise the standard deduction limit from Rs 75,000 to Rs 1 lakh under the new tax regime.
Sitharaman may bid farewell to the old tax regime or announce plans to phase it out in the future. There are also speculations that a simpler tax system, the Direct Tax Code (DTC), could be introduced during her budget speech.
She is also expected to address another key demand from taxpayers by reinstating the indexation benefits for debt funds, which were removed last year. Another move could be to increase deductions on medical expenses under the old tax regime.
As of now, taxpayers can claim a deduction of Rs 25,000 for health insurance premiums for themselves, their dependents and parents, reported Firstpost.
New Rules For UPI Transaction IDs
NPCI has issued a new circular regarding UPI transactions, set to take effect from February 1, 2025. According to the revised regulations, UPI IDs containing special characters such as #, @, $, or * will be blacklisted, making it mandatory for all digital payment users to use only “alphanumeric” characters.
In order to standardise the process of creating UPI transaction IDs, the UPI applications will no longer be able to create and generate transaction IDs using special characters.
Note: If you’re using a UPI app with special characters in the UPI transaction ID, the central system will reject the transaction from February 1 onwards.
RBI Rate Cut On Cards
The next RBI Monetary Policy Committee meeting is scheduled for February 5-7, 2025, as part of the FY 2024-25 calendar- the first to be chaired by Governor Sanjay Malhotra, an ex-civil servant appointed late last year.
The Central Bank’s Monetary Policy Committee (MPC) meets six times a year.
Many experts expect a repo rate cut, and if any changes are made to the rate, banks will implement them accordingly.
According to Moneycontrol, the RBI has kept its repo rate unchanged since April 2023, following a cumulative 250 basis point hike between May 2022 and February 2023, to balance inflation and economic growth.
