How These Financial Year Changes Will Impact Your Wealth Strategy—and What You Should Do About It

I’ve spent years helping individuals and families build smart money systems—ones that sustain them for life. And every financial year brings changes that either open doors or create new complexities. As we step into FY 2025-2026, let’s talk about the updates that could impact your money strategy—whether you’re a salaried professional, a parent planning for education abroad, or a retiree trying to maximise returns from fixed income.

Here’s what matters most this year—and what I’d advise you to do about it.

1. A Friendlier New Tax Regime for Most Salaried Individuals

One of the most impactful updates is how the new tax regime now allows tax-free income up to ₹12.75 lakh. Thanks to:

• A rebate of ₹60,000, offsetting tax liability for income up to ₹12 lakh

• A standard deduction of ₹75,000

• Revised tax slabs encouraging more people to switch to the new regime

My advice: If you’re someone who doesn’t claim many deductions (like HRA, LTA, etc.), the new regime may actually leave more money in your hand. Several of my clients in Gurugram, especially young professionals, are switching to this model this year. It’s cleaner, simpler, and can be aligned with direct investment strategies.

2. TDS Relief for Senior Citizens Doubled

A relief I welcome personally is the increase in the TDS-free interest income limit for senior citizens from ₹50,000 to ₹1 lakh. Also, NSS withdrawals on or after 29 August 2024 will not be taxed.

What I’d tell my retired clients: Revisit your bank FD and post office income plans. If your total interest income is below ₹1 lakh annually, submit Form 15H and skip TDS altogether.

3. Self-Occupied Property Gets Easier Tax Treatment

Now, you can claim nil tax on 2 self-occupied properties (SOPs) without giving any reasons for not staying in them. Earlier, you had to justify why you weren’t living in the second one.

Planning tip: For those with a second home in another city (perhaps for a parent or as a retirement home), this can be a game changer. I’ve seen many clients in Delhi NCR use this flexibility to hold properties in family trusts without worrying about tax.

4. Big TCS Rule Revisions for Foreign Remittances

Let’s decode the often-confusing Tax Collected at Source (TCS) updates:

• No TCS for remittances up to ₹10 lakh (earlier ₹7 lakh)

• TCS @20% for remittances above ₹10 lakh

• For overseas education via loan, TCS is Nil

This especially affects parents funding their children’s foreign education or people investing abroad.

Advice for parents: If you’re funding your child’s overseas education through an education loan, ensure the transaction is classified correctly to avoid TCS. A client of mine almost paid 20% unnecessarily until we clarified it was a loan-based remittance.

5. A New Deduction Avenue for Parents Under NPS Vatsalya

A lesser-known but useful benefit—parents can now claim NPS-like benefits under a scheme called NPS Vatsalya, with tax deduction up to ₹50,000.

Use case: If you’re a parent funding your child’s long-term retirement or wealth corpus, this is an excellent tax-saving and wealth-building strategy. I plan to include this in my own coaching programs going forward.

6. Changes in TDS & TCS Correction Window

The IT department has now capped correction time for TDS/TCS errors to six years. Earlier, you could correct multiple times with no time limit.

Action point: Review your TDS entries annually. If you’re a business owner or an HNI with multiple transactions, ask your CA to validate all TDS credit claims each year—don’t let old errors accumulate.

7. SEBI’s New Rules for SIFs (Specialised Investment Funds)

From April 1, SIFs can now offer more complex strategies, but will require:

• Minimum investment of ₹10 lakh

• Regulatory checks to prevent misuse

These are more suited to seasoned investors who want to diversify beyond mutual funds but understand the risks.

What I tell my savvy investors: If you’re bored with traditional mutual funds and seek alternative investments, SIFs are an option—but only with solid advisory.

8. Stricter Rules for NFO Commissions and Fund Switching

SEBI is also cleaning up the mutual fund space:

• Lower commission rates for switches via NFOs

• The intent is to prevent mis-selling by agents pushing clients toward new schemes only for higher commissions

Investor tip: Don’t switch funds unless there’s a clear performance or portfolio strategy reason. One of my clients was advised to move ₹15 lakh to an NFO. We compared it to their current fund—and guess what? The existing one had better consistency over five years.

9. DigiLocker & MF Mitra – The Digital Empowerment Tools

From this year onward:

• DigiLocker will let you fetch stock and mutual fund holdings in one place.

• MF Mitra will help investors trace unclaimed mutual funds.

Why this matters: I often meet individuals who’ve forgotten old mutual fund folios or shares from dematerialized accounts. With these tools, you’ll have better access and traceability.

Final Thoughts—What Should You Do Now?

Here’s what I suggest to all my clients, regardless of where they are in their financial journey:

Area Change Action

Tax Filing Higher income exempt under new tax regime Evaluate regime switch based on deduction profile

Seniors Higher TDS-free limit Submit 15H if income < ₹1 lakh from interest

Real Estate 2 SOPs now tax-exempt without condition Consider 2nd home strategy for wealth/retirement

Foreign Remittances TCS slab raised to ₹10 lakh Structure education payments through loans

NPS Parents can claim benefits Use ₹50K deduction tactically

Mutual Funds NFO commissions capped Avoid switching for commissions

SIFs ₹10 lakh minimum investment Consider only if you’re a seasoned investor

Digital New tools like DigiLocker & MF Mitra Use to recover lost investments and stay organized

Your Next Step

This year’s changes are not just about compliance. They’re opportunities—when you plan with clarity. Whether it’s shifting your tax regime, planning your child’s global education, or unlocking forgotten investments, you’re just one decision away from creating long-term wealth.

If you need personalised help decoding these changes, let’s talk. I help individuals and families across India build strategies that work not just today, but for a lifetime.

To your rich, empowered financial life,

Taresh Bhatia

Financial Freedom Specialist | The Richness Academy