India’s financial landscape has been busy in mid‑2025, with regulatory tweaks, central bank actions and progress on financial inclusion.
The updates below combine changes to taxation, banking rules, digital finance and macroeconomic indicators.
Note: All dates use the Asia/Kolkata time zone and reflect information available up to 7 August 2025.
Income‑Tax and PAN Rules
1. Extended ITR filing deadline and Aadhaar–PAN linkages
The Central Board of Direct Taxes extended the income‑tax return (ITR) filing deadline for Assessment Year 2025‑26 from 31 July to 15 September 2025. This extra 46 days gives taxpayers more time to file returns.
The Aadhaar–PAN linkage is now mandatory for new PAN applications. Starting 1 July 2025, applicants must verify their identity with Aadhaar. The move is intended to improve tax compliance and integrate digital identity with tax records.
2. Direct tax reforms under discussion
Parliamentary discussions are ongoing on a new Direct Tax Code. A committee has recommended more than 285 changes to simplify dispute resolution and make capital‑gains rules predictable. These reforms have not yet been adopted but could be implemented later in the year.
Banking and Payments
1. Revised bank service charges
Major banks have changed their service fees:
- State Bank of India (SBI): From 15 July 2025, SBI Card removed complimentary air‑accident insurance on premium cards and altered the Minimum Amount Due calculation to include GST, EMIs and fees.
- HDFC Bank: Introduced a 1 % fee on rent payments, wallet reloads above ₹10 000 and large utility/gaming spends; customers can earn up to 10 000 reward points per month on insurance payments.
- ICICI Bank: Adjusted ATM and cash‑transaction limits; fees apply for transactions beyond the free threshold.
- Other banks (Axis, etc.) have increased charges for ATM withdrawals, branch cash handling and passbook updates; premium accounts have higher free limits.
These changes mean customers should review their account terms to avoid unexpected fees.
2. UPI and digital payments overhaul
India’s real‑time payments system, UPI, continues to evolve:
- Credit‑line on UPI: The National Payments Corporation of India (NPCI) will allow credit lines via UPI starting August 2025. This gives consumers access to small credit via their UPI apps.
- API usage rules: NPCI mandated stricter API calls, reducing non‑financial requests that often caused outages.
- Upcoming chargeback framework: A draft system for UPI chargebacks is being discussed, giving users a formal process to dispute transactions.
3. Digital rupee (e₹) pilot
India’s central bank digital currency (CBDC) is slowly expanding. In July 2025 the Reserve Bank of India (RBI) reported that retail and wholesale e₹ transactions crossed ₹1 015 crore, with pilots involving select banks and payment apps. The focus areas include inter‑bank settlements, cross‑border payments and high‑value B2B transactions.
4. Digital lending directions
On 8 May 2025 the RBI released the Reserve Bank of India (Digital Lending) Directions, 2025, consolidating earlier guidelines and replacing the 2022 framework. Key provisions include:
- The directions extend the digital‑lending framework beyond commercial banks, NBFCs and cooperative banks to include All India Financial Institutions.
- Lending service providers (LSPs) must have explicit agreements with regulated entities (REs) detailing roles, responsibilities and liabilities.
- The framework emphasizes borrower protection, transparent disclosure of fees and grievance‑redress mechanisms.
These rules aim to protect borrowers and improve accountability in the rapidly growing digital‑lending sector.
GST and Taxation Rules
1. Non‑editable GSTR‑3B and time limits
From 1 July 2025, the GST Network announced that the monthly GSTR‑3B return will become non‑editable once filed. Businesses must verify data carefully before submission because errors cannot be corrected later, increasing compliance risk.
The GST Council also introduced a three‑year time limit for filing past returns. Taxpayers cannot file returns if more than three years have elapsed since the original due date. This rule applies to returns such as GSTR‑1, GSTR‑3B, GSTR‑4 and others, ensuring timely compliance.
2. Proposed GST slab overhaul
The prime minister’s office has reportedly approved a major GST slab rationalisation. While still under discussion, proposals include:
- Eliminating the 12 % slab and reorganising into 5 %, 18 % and 28 % slabs.
- Simplifying the tax structure to reduce complexity for businesses.
These reforms are expected to be taken up by the GST Council later in 2025.
Bond Market & Government Debt
In July 2025 the RBI conducted a ₹32 000 crore bond switch auction, swapping shorter‑term securities for longer‑term ones to manage future redemption pressure.Additionally, a ₹25 000 crore bond buyback was announced.These operations help smooth the government’s debt profile and reduce refinancing risk.
Savings & Investment Schemes
1. Small‑savings interest rates
For the April–June 2025 quarter, the Ministry of Finance kept interest rates on popular small‑savings schemes unchanged. As a result:
| Scheme | Interest rate (April–June 2025) | Notes |
|---|---|---|
| Public Provident Fund (PPF) | 7.1 % | Tax‑exempt long‑term savings |
| Post Office Savings Account | 4 % | Basic savings account |
| Sukanya Samriddhi Yojana (SSY) | 8.2 % | Scheme for girl children |
| Senior Citizen Savings Scheme (SCSS) | 8.2 % | Designed for retirees |
| 3‑year fixed deposit | 7.1 % | Mid‑term deposit |
| 5‑year recurring deposit | 6.7 % | Long‑term recurring deposit |
The government reviews these rates quarterly; they were unchanged in the previous quarter, reflecting a stable policy.
RBI Monetary Policy and Interest Rates
1. Repo rate and CRR decisions
At its 6 August 2025 meeting, the RBI’s Monetary Policy Committee kept the policy repo rate unchanged at 5.50 %. Home‑loan EMIs and interest costs therefore remain stable. In the previous meeting, the central bank had cut the repo rate by 50 basis points, reducing it from 6 % to 5.5 %.
Between February and June 2025, the RBI lowered the repo rate by a cumulative 100 basis points. The Cash Reserve Ratio (CRR) was also reduced by 100 basis points, from 4 % to 3 %, implemented in four tranches from September 2025. These moves inject liquidity into the banking system.
2. Macroeconomic outlook
The RBI maintains a neutral stance because inflation has moderated. During its August meeting, the central bank retained GDP growth forecasts at 6.5 % for FY 2025‑26 and projected inflation at 3.1 %, well within its 2–6 % target.
3. Impact on borrowers and investors
RBI’s decision to hold the repo rate means that home‑loan rates remain in the 7.3–8 % range, offered by major lenders such as SBI, HDFC and ICICI. Industry experts believe the steady rate environment supports housing demand and encourages borrowers to invest.
Financial Inclusion & Economic Outlook
1. Financial Inclusion Index (FI‑Index)
India’s Financial Inclusion Index, compiled by the RBI, improved to 67.0 in March 2025 from 64.2 in March 2024. The FI‑Index measures access, usage and quality of financial services on a scale of 0–100; the latest increase shows that more people are accessing and using formal financial services. Improvements were observed across all sub‑indices (Access, Usage and Quality), driven largely by enhanced usage and better service quality. Continued financial literacy initiatives and digital‑payment adoption have contributed to this progress.
2. Finance ministry’s mid‑2025 economic outlook
The finance ministry’s monthly economic report for June 2025 painted a picture of cautious optimism. It highlighted that India’s macroeconomic fundamentals remain resilient despite global headwinds. Forecasts project FY2025‑26 GDP growth in the range of 6.2–6.5 %, supported by robust domestic demand. However, the ministry cautioned about slowing credit growth and potential risks from a global slowdown, especially the US, which could reduce demand for Indian exports. The report also noted increased corporate reliance on bond markets due to lower borrowing costs and encouraged businesses to take advantage of schemes like the Employment Linked Incentive (ELI).
Key Takeaways for Individuals and Businesses
- File tax returns early – With the new ITR deadline (15 September 2025), individuals should file early to avoid last‑minute issues.
- Link Aadhaar when applying for a new PAN – Aadhaar verification is mandatory.
- Review bank service charges – Banks have revised fees on credit cards, ATM usage and cash deposits; staying informed can reduce costs.
- Understand UPI changes – Credit lines on UPI and forthcoming chargeback mechanisms will affect how consumers use digital payments.
- Prepare for GST compliance – Non‑editable returns and a three‑year limit for past filings mean businesses must improve internal checks.
- Monitor monetary policy – The RBI’s neutral stance keeps borrowing costs low, but future decisions will depend on inflation and global conditions.
- Leverage digital lending responsibly – New guidelines increase transparency and borrower protection.
- Track financial inclusion and economic trends – Improvements in FI‑Index and positive growth forecasts suggest expanding opportunities but caution against global risks.
Conclusion
The mid‑2025 period in India’s financial sector features significant regulatory updates, from tax filing extensions to digital‑payments innovations. The RBI has adopted a cautious yet supportive monetary stance, while the government pursues structural reforms in taxation and GST. Financial inclusion is rising, and the economy remains resilient despite global headwinds. Staying informed about these developments will help individuals and businesses make better financial decisions.
