The year 2025 is now in its final stages. December 31, 2025, is not just a date for changing the calendar; it's also a deadline for completing several important tasks on the economic front. Meanwhile, the morning of January 1, 2026, will bring several changes for the common man. Significant changes are coming to rules related to banking, taxation, digital payments, and investments. If you don't pay attention to these changes in time, you may face penalties, or your financial services could be disrupted. Here, we are providing you with detailed information about all the changes that will come into effect from the night of December 31 and the morning of January 1.
1. Major Changes in Credit Score Rules
The biggest change for borrowers in the new year will be in credit score reporting. Until now, credit bureaus (CIBIL, etc.) generally updated data on a monthly basis. From January 1, 2026, credit scores will be updated weekly. If you delay even by a single day in paying your loan EMI or credit card bill, it will immediately affect your score. Conversely, customers who make timely payments will see their scores improve faster, making it easier for them to get loans.
2. Possible Reduction in Interest Rates on Small Savings Schemes
December 31 is an important date for investors in small savings schemes (PPF, Sukanya Samriddhi, NSC, etc.). The government reviews interest rates every quarter. The Reserve Bank of India (RBI) recently cut the repo rate by 0.25% to 5.25% on December 5. Following the reduction in the repo rate, bond yields have fallen. Therefore, there is a strong possibility that the government may announce a reduction in interest rates on small savings schemes for the quarter starting January 1. If you are planning to invest, it might be wise to make a decision before December 31 to lock in the current rates.
3.ITR Filing: December 31st is the last chance
The last date for filing Income Tax Returns (ITR) for the financial year 2024-25 (AY 2025-26) was July 31st. For taxpayers who missed this deadline, the last date to file a belated return is December 31, 2025. If you do not file your return by December 31st, you will not be able to claim your tax refund. To file a return after December 31st, you will have to use the 'Updated Return' (ITR-U) option, which will be quite expensive. Filing within 12 months will incur an additional penalty of 25% of the total tax. Filing within 24 months will incur an additional penalty of 50% of the total tax. Delays of 36 to 48 months may result in an additional tax of 60% to 70%.
4. Stricter rules for UPI and Digital Payments
Given the increasing cases of digital fraud and banking scams, the rules for digital transactions are becoming stricter from January 1, 2026. According to the instructions of the government and the RBI, UPI platforms (Google Pay, PhonePe, and WhatsApp) will now have to follow a stricter KYC process. Under the new rules, an additional security layer is being added to the mobile number verification and account linking process to curb fake accounts.
5. PAN may become inactive if not linked to Aadhaar
Financial regulators have made it clear that linking PAN and Aadhaar is mandatory. If you have not yet completed this process, you may face significant difficulties from January 1, 2026. If not linked, your PAN may become 'inactive'. This can lead to problems such as delays in tax refunds, difficulties in opening bank accounts, and restrictions on investing in mutual funds or the stock market.
6. Changes in LPG and Fuel Prices
Oil marketing companies (OMCs) review fuel prices on the first day of every month. New prices for LPG (domestic and commercial), CNG, and Aviation Turbine Fuel (ATF) will be announced on January 1, 2026. These prices are subject to change based on international crude oil prices, which will directly impact household budgets and travel expenses.
7. The Imminent New Income Tax Law
The new year is set to bring another historic change in the tax system. According to the central government's announcement, the old 'Income Tax Act 1961' will soon become a thing of the past. A new income tax law is scheduled to come into effect in the country from April 1, 2026. Its aim is to simplify the tax process and reduce litigation. The next two days (December 30 and 31) are crucial for financial planning. It is advised that important tasks such as ITR filing and investments be completed by December 31 to avoid the impact of penalties and stricter rules that may come into effect in the new year.
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