India is set to implement significant changes to its identity verification and authentication systems across multiple sectors starting January 1, 2025, building upon its growing digital infrastructure initiatives. The reforms primarily affect GST compliance, pension systems, and digital payment services, representing the latest evolution in India’s push toward secure digital transactions.
The Goods and Services Tax Network (GSTN) will introduce mandatory Multi-Factor Authentication (MFA) in a phased approach, following earlier successful implementations of digital security measures in the tax system. Businesses with annual aggregate turnover exceeding Rs 20 crore must implement MFA beginning January 1, while those exceeding Rs 5 crore will follow from February 1. The requirement extends to all remaining taxpayers from April 1, 2025. The rollout matches similar security enhancements seen in other South Asian nations working to strengthen their digital tax infrastructure.
The GST reforms also include revised conditions for Input Tax Credit claims, building on previous efforts to prevent tax evasion and ensure compliance. Businesses must now ensure proper e-invoice documentation, confirm receipt of goods, and verify that suppliers have declared the supply in their GST returns and remitted applicable taxes to the government. The requirements complement India’s existing digital verification framework, which has already helped prevent significant revenue leakage.
In the pension sector, a notable advancement allows EPFO pensioners to withdraw their pension from any bank across India without additional verification requirements. The development follows the success of India’s digital benefits system, which has already demonstrated significant cost savings through improved verification methods and reduced fraud.
The e-Way Bill system will implement new restrictions, allowing generation only for base documents not older than 180 days. The modification aims to improve coordination between invoicing and logistics operations while automating reminder systems, further strengthening the digital backbone of India’s goods movement tracking system.
In the digital payments sector, the UPI 123Pay service, which caters to feature phone users, will see its transaction limit doubled from Rs 5,000 to Rs 10,000. The service, initially launched by the Reserve Bank of India, continues to expand its accessibility features as part of the broader UPI ecosystem expansion that has transformed India’s digital payment landscape. The increase in transaction limits reflects growing confidence in the security measures protecting these digital transactions.
Sources: Mobile ID World, DNA India, Economic Times, India TV News
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