The Ministry of Finance's Department of Economic Affairs (DAE) released a list of updated guidelines for Public Provident Fund (PPF) accounts, mutual funds and insurance to be implemented from today.
October brings numerous changes in rules and regulations in income tax and TDS on mutual funds, rents, and Futures and Options (F&O). Know the key changes to stay ahead.
While filing income tax returns, there will be no requirement for disclosing the Aadhaar enrollment ID in PAN allotment documents from today.
There will be key changes in tax deductions as announced in Union Budget 2024. The Tax Deductions at Source or TDS of 10% will be applicable on selected central and state government bonds. Moreover, any TDS payment with respect to life insurance policy or house rent payment will also be changed from today.
The interest rate will be applicable for Post Office Savings Account (POSA) on PPF accounts in the name of minors (aged below 18). As the person crosses this age, the standard PPF rates will agin apply. In this rule, the maturity period will be based on the date the minor person attains adulthood to become eligible for opening their regular account.
If a person is maintaining multiple PPF accounts, the overall scheme interest rate will be earned on the primary account till the deposit remains within the annual limit. If the primary account is below the applicable ‘investment limit’ for any year, the second account's balance will automatically get combined with it. The excess balance in second account will then be returned without interest while the primary account will keep on earning the ongoing interest rate. Other than primary and secondary account, no accounts will get any interest.
NRI account holders carrying ‘Form H not explicitly inquiring about the residency status’ will stop receiving POSA interest rate from October 1, 2024. “This rule will be implemented for those Indian citizens who became NRIs during the currency of the account,” according to the circular announced on August 21, 2024.
The Securities Transaction Tax (STT), applicable to Futures and Options (F&O) will increase from today. The STT on the sale of options will be 0.1% of the premium (previously 0.0625%). The STT on the sale of futures is currently 0.02% of the trade price (earlier 0.0125%).
Starting from today, the Reserve Bank of India (RBI) will ask banks and NBFCs to submit a Key Facts Statement or KFS for all types of retail loans. The borrowers will receive a clear and comprehensive breakdown of loan terms and fees in this document. This will eliminate the issues of hidden charges while providing improved financial clarity.
From October 1, the buyback proceeds of companies will be considered as dividend income and taxed as per the shareholder’s personal income tax slab. This will significantly impact investors, especially startup employees who use Employee Stock Option (ESOP) buybacks.
Today marks the start of the new Direct Tax Vivad Se Vishwas Scheme 2024. This is aimed to decrease the burden of tax litigation offering taxpayers a streamlined mechanism for resolving the disputes. Through this scheme, new appellants can sort out the issues at a lower settlement amounts. If the person declare disputes before December 31, he/she will receive additional benefits too.
In a nutshell, the new rules will streamline the account management process while impacting the interest rates and regulations. Stay informed to make the most of these updates for safeguarding your financial interests.
