The month of October brings with it festivities, along with several other changes, including personal finance. From the new security transaction tax (STT) rule, to tax buyback proceeds shifting from companies to shareholders, the changes would extend to post office small savings accounts, public provident fund (PPF) rule change, and direct tax vivad se vishwas scheme.
Let’s find out the details of these changes:
New STT Rule: Starting October 1, 2024, the STT on futures and options trading is set to increase. This move comes from moderating speculative trading in the fast-expanding derivatives market. The STT will increase from 0.025 per cent to 0.1 per cent of option premium. On the other hand, the STT on futures will increase from 0.0125 per cent to 0.02 per cent of the trade price.
Post Office Small Savings Account: There will be changes to the post office small savings account (POSSA), from October 1 onwards. While the first account will continue to earn interest at the prevailing interest rate, the second account will earn interest at the POSSA rate, along with an additional 200 basis points (two per cent).
PPF Rule Change: Starting October 1, there will be rule changes for PPF, as suggested by the Ministry of Finance Department of Economic Affairs. These changes include updated guidelines for PPF accounts for minors. Then there are guidelines for individuals with multiple PPF accounts. Also, NRIs are extending their PPF accounts through post offices under the National Small Savings (NSS) schemes.
The Post Office Savings Account (POSA) interest rate will be applicable for PPF accounts for minors until the age of 18, beyond which, the standard PPF rates will apply.
Share Buyback Tax Regime: From October 1, 2024, onwards, the tax burden for buybacks will shift from companies to shareholders. The new rules include the tax buyback proceeds as dividend income based on the shareholder’s income tax slab. The new rules require companies to deduct tax at source (TDS) at 10 per cent for resident individuals and 20 per cent for non-resident individuals.
Direct Tax Vived Se Vishwas Scheme 2024: This scheme will bring more certainty to taxpayers and reduce litigation. "In pursuance of the announcement in Union Budget 2024-25 by Union Minister for Finance and Corporate Affairs Smt. Nirmala Sitharaman, the Central Board of Direct Taxes (CBDT) has notified the Direct Tax Vivad Se Vishwas Scheme, 2024 (referred as DTVSV, 2024) to resolve pending appeals in the case of income tax disputes. The said scheme shall come into force with effect from 1st Oct. 2024,” according to an official press statement.
