12 money rules changing from October 1 in India

Come October 1, 2024, there will be a host of crucial money changes that will come into effect that may have an impact on your finances and investments.    

Here is a look at 12 money and tax rules you must know that come into effect on October 1:  

1 - Revised rules for PPF accounts of NRIs

For non-resident Indians (NRIs) holding a Public Provident Fund (PPF) account, there have been specific guidelines. For NRIs who have been investing in PPF accounts without disclosing their status, it will cease to be business as usual.  

From October 1, this account will earn zero interest.  

2 - Change in rules of post office small saving schemes

From Tuesday (October 1), new rules for the regularisation of irregular PPF accounts, Sukanya Samriddhi Yojana (SSY), and other small saving schemes functional via post offices will be implemented.  

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The Ministry of Finance has notified new rules which deal with the regularisation of accounts opened in the name of minors and multiple PPF accounts.  

Irregular accounts opened under the National Small Savings (NSS) schemes will also be impacted from October 1.

3 - 20% TDS waived on mutual fund unit repurchase

To streamline tax deducted at source (TDS) rates, Finance Minister Nirmala Sitharaman in Union Budget 2024-25 had proposed to eliminate the 20 per cent TDS on mutual fund unit repurchases and Unit Trust of India (UTI) transactions. This change will take effect on October 1.

The Finance Act, 2024, has removed Section 194F of the Income Tax Act, which pertains to payments made for the repurchase of units by mutual funds or UTI. Under the section, the party responsible for making payments related to subsection (2) of Section 80CCB was required to deduct income tax at a 20 per cent rate.

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The removal of the 20 per cent TDS on mutual fund unit repurchases is a significant step in reducing the tax burden for investors.

4 - TDS on immovable property sale

Amendments to Section 194-IA, which requires a 1 per cent TDS on payments for the sale of immovable property exceeding Rs 50 lakh, will come into effect on October 1.

5 - Direct Tax Vivad Se Vishwas Scheme 2024

The Direct Tax Vivad Se Vishwas Scheme, 2024, of the Central Board of Direct Taxes will come into effect from October 1. The scheme was introduced by the Finance Minister in this year’s budget to simplify and speed up the resolution of tax disputes, reduce litigation and associated costs.

This dispute resolution scheme offers lower settlement amounts for ‘new appellants’ compared to ‘old appellants’. Also, taxpayers, who submit their declarations by December 31, will benefit from reduced settlement amounts.

6 - New buyback tax structure

From October 1, a new buyback tax structure will come into effect. Till now, companies were taxed at 20 per cent on buybacks, while investors received tax-free income. Under the new regulations, the tax liability shifts from companies to shareholders.  

Going forward, buyback proceeds will be treated as dividend income, rather than capital gains and taxed as per the income tax slab of the investor.

Start-up employees may also experience a significant increase in taxes on their Employee Stock Option (ESOP) exits through buybacks from October 1 onwards.

7 - SEBI accelerates bonus-issue process for trading 

Starting October 1, all bonus issues will be available for trading two days after the record date. Till now, shares from such issues could only be traded about two weeks after the record date, which is the cutoff date used by the issuer company to determine eligible shareholders for a bonus issue.

The Securities and Exchange Board of India (SEBI) has introduced T+2 trading for bonus shares, where T represents the record date, through a circular issued on September 16.

8 - STT hike 

The Securities Transaction Tax (STT) applicable to futures and options (F&O) is set to increase from October 1. The STT on the sale of options will rise from 0.0625 per cent to 0.1 per cent of the premium, while the STT on the sale of futures will go up from 0.0125 per cent to 0.02 per cent of the trade price.  

9 - Aadhaar rule related to PAN allotment

From October 1, the provision of mentioning the Aadhaar enrollment ID instead of Aadhaar number will no longer be available. Individuals will no longer be required to disclose Aadhaar enrollment ID in PAN allotment documents as well as while filing income tax returns (ITR).

10 - ICICI Bank debit card charges

According to the details available on ICICI Bank’s website, from October 1, debit card users 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 October, November, December 2024 quarter, you need to spend a minimum of Rs 10,000 in the July, August, September 2024 quarter and similarly for following quarters,” the bank said.

11 - HDFC Bank new rules for credit card 

From October 1, HDFC Bank will introduce new limitations on rewards redemptions for its Infinia credit cardholders. These adjustments will impact the redemption of points for Apple products and Tanishq vouchers via the HDFC SmartBuy platform.

At present, there is no cap on the number of Apple products that cardholders can redeem their reward points for. However, starting October 1, 2024, this will change.

Also, SmartBuy portal, from October 1, will cap the redemption of Reward Points for Tanishq vouchers at 50,000 Reward Points per calendar quarter. These changes apply only to Infinia and Infinia Metal Cards.

12 - PNB’s updated charges

Punjab National Bank (PNB) has announced adjustments to some on-credit-related service fees applicable to savings accounts. These changes pertain to maintaining a minimum average balance, issuing demand drafts, duplicating demand drafts and cheques (including ECS), return fees, and locker rental charges.