Major Changes Effective March 1, 2025: Income Tax, GST & Regulatory Updates

From March 1, 2025, significant regulatory and financial adjustments will impact individuals and businesses alike. Key changes include the ability for unregistered persons to generate e-Way Bills using Form ENR-03, simplifying goods movement under GST. The Finance Bill 2025, now the Finance Act 2025, introduces a higher income tax exemption limit of ₹12 lakh, alongside revised TDS and TCS thresholds and new deductions under NPS ‘Vatsalya’ (Section 80CCD (1B)). GST updates streamline reporting with negative liability reporting in GSTR-3B and enhanced HSN code validation in GSTR-1 & GSTR-1A. The new GST registration process under Rule 8 of CGST Rules, 2017, mandates stricter authentication measures, impacting applicants opting for Aadhaar Authentication. Additionally, crucial compliance deadlines include LUT renewal, Composition Scheme enrolment, and implementation of mandatory e-invoicing from April 1, 2025, for businesses with turnover exceeding ₹5 crore. SEBI’s updated nomination rules for trading and DEMAT accounts further mandate beneficiary nomination by March 31, 2025. These changes necessitate proactive compliance measures to navigate the evolving regulatory landscape effectively.

There are several key regulatory and financial changes which will come into effect from March 1, 2025. Here is a list of all the important changes, along with compliance deadlines:

1. E-Way Bill for Unregistered Persons

• Unregistered persons can now generate an e-Way Bill using Form ENR-03, available on the e-Way Bill portal.
• This change will help individuals and entities who are not registered under GST but are involved in goods movement.

2. Finance Bill 2025 – Key Taxation Changes

The Finance Bill 2025 as approved, becoming the Finance Act 2025, bringing the following major tax changes:

• Higher Income Tax Exemption Limit – Taxpayers with an income of up to ₹12 lakh will now be exempt from income tax under the new tax regime (New Slab Rate)
• Changes in TDS & TCS Thresholds – Various TDS (Tax Deducted at Source) and TCS (Tax Collected at Source) limits will be revised, affecting businesses involved in high-value transactions.
• No TCS on Sale from 1^st April 2025.
• Changes in Self-Occupied House Property Rules.
• Rebate & Marginal Relief Changes.
• New Deduction Under NPS ‘Vatsalya’ (Section 80CCD (1B)) – Additional tax benefits will be available for National Pension Scheme (NPS) investments.
• Revised Turnover & Investment Limits for MSMEs.
• Increase in the Period for Filing Updated Income Tax Returns – Taxpayers can now file updated income tax returns for up to 48 months from the end of the assessment year, allowing more flexibility to correct past returns.

3. GST Updates Effective from March 1, 2025

• Negative Liability in GSTR-3B – Businesses can now report negative liability in GSTR-3B, improving GST return accuracy.
• HSN Code Selection & Validation in GSTR-1 & GSTR-1A –

• Manual entry of HSN codes is replaced with a drop-down menu to reduce errors.
• Table-12 is now bifurcated into B2B and B2C transactions, ensuring clearer reporting.
• Initial validation warnings will be issued for incorrect values, but they will not block filing.

4. New GST Registration Process (Rule 8 of CGST Rules, 2017)

The GST registration process now includes stricter authentication measures:

• For applicants NOT opting for Aadhaar Authentication –

• Must visit a GST Suvidha Kendra for photo capturing and document verification.

• For Aadhaar Authentication (with Biometric Verification) –

• Promoters/Partners must visit GST Suvidha Kendra for biometric authentication.
• If already verified in another State/UT, only document verification is needed.

• Non-Generation of Application Reference Number (ARN) –

• If verification is not completed within 15 days, the ARN will not be generated.

5. Important GST & Tax Compliance Deadlines before March 31, 2025

• LUT (Letter of Undertaking) Renewal – Apply for Form GST RFD-11 before March 31, 2025, for tax-free exports.
• Composition Scheme Enrolment – File Form CMP-02 before March 31, 2025, to opt for the Composition Scheme.
• QRMP Scheme Selection – Opt-in or opt-out of Quarterly Return Filing before April 30, 2025.
• Declaration for GTA Taxpayers – File Annexure V & VI before March 31, 2025.
• GST Refund for FY 2022-23 – Claim pending GST refunds before March 31, 2025.
• Mandatory E-Invoicing from April 1, 2025 – If your turnover exceeds ₹5 crore, be ready to implement e-invoicing.
• GST Amnesty Scheme under Section 128A – To avail GST penalty relief, pay tax dues before March 31, 2025.

6. SEBI Nomination Rules Update

• SEBI mandates all trading & DEMAT account holders to either nominate a beneficiary or opt out by March 31, 2025.
• Failure to comply will lead to account freezing, restricting trading and investment activities.

Thus, the individuals and companies shall take into consideration the above mentioned changes to ensure smooth compliances.