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A) Discontinuation of Aadhaar Enrolment ID Usage*
Starting October 1, 2024, the government will no longer require individuals to quote their Aadhaar Enrolment ID for financial transactions. Instead, the Aadhaar number itself will suffice. This change aims to streamline the identification process while ensuring compliance with regulations.
B) Adjustments to Tax Deducted at Source (TDS) Rates**
The government will reduce TDS rates for certain categories, effective October 1, 2024. The specific adjustments are as follows:
| Section |
Present TDS Rate |
Proposed TDS Rate |
With effect from |
|---|---|---|---|
| Section 194DA – Payment in respect of life insurance policy |
5% |
2% |
1.10.2024 |
| Section 194G – Commission etc on sale of lottery tickets |
5% |
2% |
1.10.2024 |
| Section 194H – Payment of commission or brokerage |
5% |
2% |
1.10.2024 |
| Section 194-IB – Payment of rent by individual or HUF |
5% |
2% |
1.10.2024 |
| Section 194M – Payment of certain sums by certain individuals or Hindu undivided family |
5% |
2% |
1.10.2024 |
| Section 194-O – Payment of certain sums by e-commerce operator to e-commerce participant |
1% |
0.1% |
1.10.2024 |
| Section 194F relating to payments on account of repurchase of units by Mutual Fund or Unit Trust of India |
Proposed to be omitted |
1.10.2024 |
|
These changes are expected to alleviate the tax burden on individuals, particularly in areas like insurance and rental payments.
C) Tax Implications for Floating Rate Savings Bonds
Effective October 1, 2024, interest earned on Floating Rate Savings Bonds will be taxable if it exceeds ₹10,000 in a financial year. This measure aims to enhance transparency in the taxation of government securities.
D) Increased Security Transactions Tax
The Securities Transaction Tax (STT) on futures and options will see an increase, with rates set at 0.02% for futures and 0.1% for options, beginning October 1, 2024. This increase is aimed at regulating speculative trading in the securities market.
E) Tax on Share Buybacks
In an effort to create equity among investors, the government will tax income derived from share buybacks starting October 1. This will ensure that recipients of buyback income pay taxes on this amount, aligning with broader tax policies.
F) Direct Tax Vivad Se Vishwas Scheme, 2024
This new scheme will commence on October 1, 2024, offering reduced settlement amounts for ‘new appellants’ compared to ‘old appellants.’ Taxpayers filing declarations by December 31, 2024, will benefit from lower settlement amounts than those filing afterward.
2. Updates on National Small Savings Schemes via Post Offices
The following changes will affect National Small Savings (NSS) accounts:
Irregular NSS Accounts
1. For Two NSS-87 Accounts Opened Before April 2, 1990:
– The first account will earn the prevailing scheme rate.
– The second account will earn the prevailing POSA rate plus 200 basis points on the outstanding balance.
– From October 1, 2024, both accounts will earn 0% interest.
2. For Two NSS-87 Accounts Opened After April 2, 1990:
– The first account earns the prevailing scheme rate.
– The second account earns the prevailing POSA rate.
– Both accounts will earn 0% interest starting October 1, 2024.
3. For More Than Two NSS-87 Accounts:
– The same conditions apply; no interest will be paid on additional accounts, and the principal will be refunded to the investor.
4. PPF Accounts for Minors:
– Interest will be paid at the POSA rate until the minor reaches 18 years old, after which the standard rate will apply.
5. Multiple PPF Accounts:
– The primary account will earn the scheme rate, while excess amounts in secondary accounts will earn 0% interest.
6. NRI PPF Accounts:
– Active NRI PPF accounts will earn POSA rates until September 30, 2024. After this date, they will earn 0% interest.
7. Minor Savings Accounts (Except PPF):
– Irregular accounts can be regularized at the prevailing POSA rate for simple interest.
8. Sukanya Samriddhi Accounts (SSA) Opened by Grandparents:
– Accounts opened under grandparent guardianship will be transferred to legal guardians, and any irregular accounts will be closed.
3. Transaction Fee Revisions for NSE and BSE
Both the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) have announced changes to their transaction fees, effective October 1, 2024. The NSE will introduce charges across both cash and derivatives segments, while the BSE will specifically revise charges related to Sensex and Bankex options contracts.
4. Changes to HDFC Credit Card Policies
HDFC Bank will implement updates to its loyalty program for select credit cards, effective October 1, 2024. One notable change is the limitation on redeeming reward points for Apple products, which will now be capped at one product per calendar quarter through the Smartbuy platform.
5. ICICI Bank Airport Lounge Access
Starting October 1, 2024, ICICI Bank customers can enjoy complimentary access to two airport lounges, provided they spend a minimum of ₹10,000 in the preceding calendar quarter. This initiative aims to enhance customer experience for those who frequently travel.
6. RBI’s Key Facts Statement (KFS) Requirement
Beginning October 1, 2024, the Reserve Bank of India (RBI) will mandate that banks and lenders provide a Key Facts Statement (KFS) to borrowers, detailing essential information about loan agreement terms, including the all-inclusive interest cost for retail and MSME loans.
These changes reflect the government’s ongoing efforts to improve financial transparency, equity, and convenience for citizens. Understanding these updates is crucial for effective financial planning and compliance.
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