Major Rule Changes Effective from 1st July 2025 – Everything You Must Know Today

Major Rule Changes: As of 1st July 2025, several significant regulatory and policy changes across India have come into force, impacting taxpayers, financial markets, corporate compliance, labor laws, and daily household affairs. In this detailed briefing, we walk you through all critical updates, ensuring you’re equipped with the information needed to stay compliant and optimize your financial planning.

Income Tax Rules 2025: Key Changes Taxpayers Must Understand

New TDS Slabs and Filing Compliance | Major Rule Changes

The Central Board of Direct Taxes (CBDT) has revised several Tax Deducted at Source (TDS) provisions. Highlights include:

• Crypto & Virtual Digital Assets (VDA): TDS continues at 1%, but reporting under Form 26QE is now mandatory.

• Freelancers and Gig Workers: Platforms must deduct 5% TDS once annual payments cross ₹1,00,000.

• Increased Penalties: Late TDS filing now attracts a flat penalty of ₹200 per day, capped at the TDS amount.

Revised Income Tax Return (ITR) Filing Thresholds

• Individuals earning above ₹3,00,000 annually must file returns mandatorily (previously ₹5,00,000).

• The government aims to widen the tax base and improve transparency.

GST Council Reforms: What Changed for Small Businesses

GST on Online Gaming and Casinos

Effective July 1, 2025, 28% GST is now applicable on face value for online gaming, horse racing, and casinos.

• Online platforms must remit GST at the time of crediting chips or wallets.

• No threshold exemptions.

Relief for Small Traders

• Composition scheme threshold raised from ₹1.5 crore to ₹2 crore.

• Quarterly return filers can now opt for Invoice Furnishing Facility (IFF) without restriction.

Labor Code Implementation Begins Phase-Wise

New Working Hour Regulations

The 4 New Labor Codes partially roll out from July 1:

• Working hours: Up to 12 hours/day allowed, but not more than 48 hours/week.

• Leave encashment: Rules revised under the Code on Wages.

• Gig economy protection: Aggregator platforms now must provide social security coverage.

Gratuity & EPF Changes

• Gratuity eligibility reduced to 1 year from 5 years for fixed-term workers.

• EPF contributions now computed on gross salary, not just basic pay.

Real Estate & RERA Norms Updated

RERA Compliance Tightened

The Ministry of Housing has made compliance under the Real Estate Regulation Act (RERA) stricter:

• Builders must update project status quarterly on RERA portals.

• Delayed projects will now automatically invite penalties of ₹5 lakh or 2% of project cost (whichever is higher).

Tax Exemptions on Home Loan Interest Revamped

• Under Section 80EEA, deduction on home loan interest extended till FY 2027.

• Cap raised to ₹2.5 lakh for first-time buyers of affordable homes.

New Bank Locker Agreement Rule Now Mandatory

From July 1, 2025:

• All locker holders must sign revised locker agreements, including clauses on liability in case of natural disasters, theft, and unauthorized access.

• Non-compliance may result in suspension of locker access.

Demat Account KYC Update Deadline

Mandatory Re-KYC for Trading Accounts

• SEBI has set July 31, 2025 as the final deadline for mandatory KYC revalidation for all trading and Demat accounts.

• PAN-Aadhaar linking and email verification is compulsory.

• Accounts non-compliant beyond the deadline will be frozen.

LPG & Utility Subsidy Reforms

Revised LPG Subsidy Allocation

• LPG subsidies now directly linked to income slabs.

• Households earning above ₹15 lakh annually no longer receive subsidies.

• New e-KYC verification required to claim subsidies.

TRAI’s New SIM Card Rules: Full KYC Enforcement

One Person – Nine SIMs Limit

• Telecom Regulatory Authority of India (TRAI) has enforced new rules:

  • Only 9 active SIMs allowed per individual.

  • Full biometric KYC required at purchase.

• Violations will trigger auto deactivation of SIMs.

Education Loan Tax Benefit Cap Introduced

• Section 80E tax deduction for education loan interest now capped to ₹1.5 lakh per annum.

• Loans from recognized NBFCs now also eligible for tax deduction, expanding scope beyond traditional banks.

Interest Rate on Small Savings Schemes Recalibrated

The revised rates aim to align with current inflationary trends and investor sentiment.

Final Words: Compliance, Awareness, and Strategic Planning

The sweeping changes effective from July 1, 2025, mark a transformative step in regulatory modernization. We strongly recommend:

• Reviewing your tax filings and bank agreements.

• Verifying KYC across financial and telecom services.

• Updating employment and compliance policies in alignment with labor codes.

• Staying informed through official portals like incometax.gov.in, gst.gov.in, and rera.gov.in.