New Delhi: Come October and several rules pertaining to banking, financial and other sectors are going to change. Since these new rules are set to impact the day-to-day lives of a common man hence it is important to know more about these changes in detail.
From 1 October 2024, several proposals announced by Finance Minister Nirmala Sitharaman during her Budget 2024-25 announcement will come into effect.
1. Key Income Tax Rules That Will Be Effective From October 1
A. Discontinuation of quoting Aadhaar Enrolment ID
The government will discontinue the quoting of Aadhaar Enrolment ID in place of Aadhaar number effective from 1 October 2024.
B. Rationalisation of tax deducted at source (TDS) rates
From 1 October 2024 TDS rates will be brought from 5 percent to 2 percent in certain sections and omit section 194F where TDS rate is 20 per cent, as given below:
| 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 |
|
C. Floating Rate Savings Bonds
Floating Rate Savings Bonds, 2020 (Taxable) or any other security of the Central Government or the State Government as may be notified by the Central Government shall be liable for deduction of tax, if the interest payable on such securities exceeds Rs 10,000 during the financial year. This amendment will take effect from 1st October, 2024.
D. Security Transactions Tax On F&O
Security Transactions Tax on futures and options of securities is proposed to be increased to 0.02 per cent and 0.1 per cent respectively.
D. Share Buy back
For reasons of equity, government will tax income received on buy back of shares in the hands of the recipient from October 1.
F. Direct Tax Vivad Se Vishwas (DTVSV) Scheme, 2024
Direct Tax Vivad Se Vishwas (DTVSV) Scheme, 2024, will come into force with effect from 1 October 2024. The Direct Tax Vivad Se Vishwas Scheme provides for lesser settlement amounts for a ‘new appellant’ in comparison to an ‘old appellant’. The DTVSV Scheme also provides for lesser settlement amounts for taxpayers who file declaration on or before 31.12.2024 in comparison to those who file thereafter.
2. Rules Pertaining To National Small Savings Schemes Through Post Offices
(1). lrregular NSS accounts: These have been assessed to be of the following types.
(a). Two NSS-87 accounts opened prior to DG Posts’Order. No. 35- 19/90 SB- lll dated 02.04.1990:
(i). The earliest/first opened account will get prevailing scheme rate.
(ii). The second account (opened after the first account) will get prevailing POSA rate plus 200 bps on the outstanding balance.
(iii). Points (i) and (ii) will be subject to the following conditions:
(a). Cumulative deposits in both the accounts put together should not exceed the applicable deposit limits for each year.
(b) Excess deposits (if any) shall be refunded to the investor without any interest.
(iv). Points (i) to (iii) are in the nature of one-time special dispensation allowed to investors of NSS-87 till 30 September 2024 of the date of OM dated 12th July 2024 issued by Ministry of Finance.
(v). From 1 Oct 2024 onwards, both the accounts will earn zero percent rate of interest.
(b) Two NSS-87 accounts opened after DG Posts’ Order. No, 35- 19/90-SB-lll dated 02.04.1 990:
(i). The earlies first opened account will get the prevailing scheme
(ii). The second account (opened after the first account) will get prevailing POSA rate on the outstanding balance,
(iii). Points (i) and (ii) are subject to the following conditions:
(a). Cumulative deposits in both accounts together should not exceed the applicable deposit limit for each year.
(b). Excess deposits (if any) shall be refunded without any interest to the investor.
(iv). Points (i) to (iii) are in the nature of one-time special dispensation to the investors ol NSS-87 till 30 September 2024 from the date of OM dated 12th July 2024 issued by Ministry of Finance.
(v). From 1 Oct 2024 onwards, both the accounts will earn zero percent rate of interest.
(c). ln case of more than two NSS-87 accounts
Principles outlined for two accounts opened before/after DG Posts’ Order. No. 35-19/90-SB-lll dated 02.04.1990, shall apply. For the third account more irregular accounts, no interest shall be paid and the principal amount shall be refunded to the investor.
Please be advised that all accounts opened under NSS-87 and NSS-92 shall get zero percent rate of interest rate from 1 October 2024.
2. PPF account opened under the name a minor
(a). POSA interest shall be paid for such irregular accounts until the individual (minor) becomes eligible for opening of account, that is, the individual attains 18 years of age. Thereafter, the applicable interest rate will be paid.
(b). Maturity period for such accounts will be calculated from the date the minor becomes an adult, that is, the date from which the individual becomes eligible to open the account.
3. More than one PPF Account
(a). The primary account shall earn the scheme rate of interest subject to the deposit being within the ceiling applicable for each year. (Primary Account is one of the two accounts chosen by the investor in any Post Office/ agency bank where the investor prefers to continue with the account upon regularisation).
(b). The balance amount in the second account shall be merged with the first account subject to the primary account remaining within the applicable investment ceiling in each year. Post-merger, the primary account will continue to enjoy the prevailing scheme rate of interest. Excess balance in the second account, if any, shall be refunded with Zero percent rate of interest.
(c). Any additional accounts beyond the primary and second account, shall earn zero percent rate of interest from the date of opening of that account.
4. Extension of PPF account by NRI
For only those active NRI’s PPF accounts opened under the Public Provident Fund Scheme (PPF), 1968, where Form H did not specifically ask the residency status of the account holder, POSA rate of interest shall be given to the account holder (Indian citizen who became NRI during the currency of Account) till 30th September 2024. Thereafter, the said account shall earn zero percent rate of interest.
(5). Small Savings scheme account opened under the name of a minor (Except PPF and SSA)
Such irregular accounts may be regularised with simple interest. The interest rate for calculation of simple interest on the account should be the prevailing POSA rate.
(6). Regularization of Sukanya Samriddhl Account (SSA) opened by Grandparents, other than Guardian:
(a). ln case of accounts opened under the guardianship of grandparents (who are other than legal guardian), the guardianship shall be transferred to a person entitled under the law in force, that is, to the natural guardian (alive parents) or Legal Guardian.
(b). lf more than two accounts are opened in a family in violation of Para 3 of Sukanya Samriddhi Account Scheme, 2019, then the irregular accounts shall be closed by treating it as account opened in contravention to the scheme guidelines.
3. NSE, BSE Transaction Fees
The NSE and BSE have announced revisions to their transaction charges. It is set to take effect from October 1, 2024. NSE has introduced charges for both the cash and derivatives segments, while BSE has made changes specifically to the Sensex and Bankex options contracts within its equity derivatives segment.
4. HDFC Credit Card Charges
HDFC Bank is updating its loyalty program for specific credit cards. The new rules are set to take effect on October 1, 2024. One significant change is the limitation on redeeming reward points for Apple products. It will now be capped at one product per calendar quarter through the Smartbuy platform.
5. ICICI Bank Debit Card Airport Lounge Access
ICICI Bank has said that, starting October 01, 2024, customers can enjoy two complimentary airport lounge access by spending Rs 10,000 in the preceding calendar quarter.
“Spends made in the preceding calendar quarter will unlock access for the subsequent calendar quarter. To be eligible for complimentary lounge access in Oct- Nov- Dec, 2024 quarter, you need to spend a minimum of Rs 10,000 in the Jul-Aug-Sept, 2024 quarter and similarly for following quarters.
6. RBI KFS For Retail And MSME Loan
Reserve Bank has issued a circular telling banks and lenders that they will have to provide key facts statement (KFS) about the loan agreement terms, including all-inclusive interest cost to borrowers for retail and MSME loans, from October 1.
