Big Financial Changes May 2025 That Could Affect Your Budget
By Team CodeForBanks | May 3, 2025
Big financial changes can be witnessed now in May 2025, that will affect your budget, whether more or less. For instance, starting May 1, taking out cash from the ATMs will be costlier than what it used to be. On the other hand, a reduction in commercial LPG prices will do you some financial good. Read further to know what other financial changes have been implemented that are going to affect your wallet starting this May. It will include how you manage taxes, how you travel, how much you spend, and more.
Big Financial Changes May 2025 – Key Updates You Need to Know
ATM Withdrawals Made Expensive
You will now be charged more for taking out cash from the ATMs, but after a certain limit. Free transactions are allowed up to five in non-metros and three in metro cities, effective May 1, 2025. This includes both financial (cash withdrawals) and non-financial (balance enquiry). Once the free monthly limit is over, you will have to pay more than you were doing by now.
The update aims to help banks cover ATM maintenance charges.
Changed Train Ticket Rules
Two major railway rules have come up. One, the advance booking window is now shortened to just 60 days from the earlier 120 days. Second, if you are on the waiting list, you will not be allowed to travel in sleeper or AC coaches. These changes are also effective from May 1, 2025 itself.
Yet another update is that you can now claim refunds on cancelled tickets within two days' time only.
FD Rates Changed
Due to the repo rate cut by RBI and the changing market conditions, banks are changing their fixed deposit interest rates. While some are raising the rates of interest, others are reducing them.
IDBI Bank is now offering a maximum rate of 7 per cent interest per annum. Furthermore, non-bank lenders have slashed FD rates as well. SFL is now offering up to 9.93 per cent effective yield per annum. These changes could impact retirees and conservative savers who are dependent on FD income.
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Commercial LPG Prices Reduced
LPG price cuts comprise of a Rs.17 cut on commercial LPG cylinders (19 kg). Starting May 1, the new prices in some cities are as follows:
- Rs.1,747.50 in Delhi
- Rs.1,699 in Mumbai
- Rs.1,851.50 in Kolkata
- Rs.1,906 in Chennai
This change is going to benefit eateries and other commercial users.
Talking of domestic LPG rates, they're the same for now. However, they may also see a change as more regular price changes are expected to happen.
For Central Government Pensioners
There's a new safeguard for them. Banks must now pay 8 per cent annual interest on delayed pension payments. While pensioners will get this interest automatically, without needing to file a complaint, the move ensures better financial stability for retirees.
A Drop in Home Loan EMIs
Another good news, those looking to purchase homes will now be able to enjoy reduced EMIs on home loans. The RBI's repo rate cut from 6.25% to 6% in April, 2025 is the cause for this change. Hence, if your loan is repo-linked, you can expect lower EMIs (Equated Monthly Instalments) this month.
Another good part is that the repo rate cut by the central bank being the second in April, 2025, banks may lower their loan interest rates too.
Tax on Luxury Purchases Increased
The Indian government has introduced a 1 per cent tax collected at source (TCS) on luxury purchases of over Rs.10 lakh. Some of the items included are:
- Expensive watches, handbags, and shoes
- Art collectibles and antiques
- Yachts, helicopters, and high-end home entertainment gear
- Interest on Delayed Pensions
Easier Pension Withdrawals
Good for salaried employees, the Employees' Provident Fund Organisation (EPFO) has simplified the process to withdraw provident fund (PF) money. This step comes with many pointers:
- Removal of bank-document uploads and employer approval for seeding bank accounts with UAN
- Facial-authentication Universal Account Number (UAN) activation via the UMANG app
- Simplified transfer claims with a revamped Form 13
- Self-declared advances under Para 68B (7) for home improvements
ITR Filing Started for AY 2025-26
This is regarding your Income Tax Returns filing. The Income Tax Department of India has released the ITR-1 (Sahaj) as well as ITR-4 forms. So, the forms can be used for the purpose of income tax filing. If your income is up to R.50 lakh, you can start your Income Tax Return filing now.
Second key update is that those with their long-term capital gains up to Rs.1.25 lakhs can still use the ITR-1 form and do not need to switch to the ITR-2 form.
Moreover, other forms are also expected to be out soon.
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