From This year October 1 Indian government has announced several financial rules. These rules including those related to health insurance, retail loans, share buybacks, and bonus shares, are set to change, directly impacting your life. Read this Business Desk report to learn more about these updates.
As per RBI directives, banks and non-banking financial companies (NBFCs) will now be required to disclose key details to retail loan customers starting October 1. This will provide customers with a clear understanding of the total cost of the loan.
According to the RBI, this statement should follow a standard format and prominently include information about fees and other charges associated with the loan. Additionally, this information must be presented to customers in simple and easily understandable language.
Higher Premium on Policy Surrender
Policyholders will now receive higher payouts on policy surrenders. As per the insurance regulator, insurance companies must pay even if the policy is surrendered after one year. Previously, no payment was made for policies surrendered within the first year.
Reduced Waiting Period for Health Insurance
For health insurance policies purchased from October 1, the maximum waiting period has been reduced to three years from the earlier four years. Additionally, the period for contesting claims on grounds other than misrepresentation and fraud has been reduced from eight years to five years.
20% Tax on Share Buybacks
A 20% tax will now be levied on shareholders participating in company share buybacks post-October 1. Previously, this tax was applicable to companies. Under the new rules, buyback proceeds will be treated as dividends, added to the total income of shareholders, and taxed. Startup employees selling company-allotted shares will also be subject to tax under this provision.
Bonus Shares Tradeable After Two Days
From October 1, trading of bonus shares will commence two days after the record date. Previously, trading of bonus shares took approximately two weeks.
No 20% TDS on Mutual Fund Unit Repurchase
Starting October 1, a 20% TDS will no longer apply to the repurchase of mutual fund units or units of the Unit Trust of India (UTI). This change, announced by Finance Minister Nirmala Sitharaman in the July budget, aims to reduce the tax burden on investors.
Apply for Vivaad se Vishwas 2.0
Applications for the Vivaad se Vishwas 2.0 scheme, launched to resolve pending tax disputes, can be submitted from October 1. This initiative aims to reduce the backlog of tax-related cases. Applications for the scheme will remain open until December 31, 2024.
📢 Vivaad Se Vishwas Scheme 2.0 is here! 🌟 A golden chance for taxpayers to settle disputes with reduced penalties and interest. Simplified resolutions, less litigation—towards a more taxpayer-friendly India! #IncomeTax #VivaadSeVishwas #TaxReform
— Praveen Sharma l प्रवीण शर्मा ⭕🇮🇳 (@capraveensh) November 4, 2024
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Closure of PPF Accounts for NRIs
Non-resident Indians (NRIs) are permitted to invest in Public Provident Fund (PPF) accounts, but it is mandatory for account holders to declare their NRI status when opening such accounts.
From October 1, PPF accounts of NRIs who failed to disclose their NRI status will be closed. Deposits made in these accounts until September 30, 2024, will earn interest at the post office savings account rate. However, no interest will be paid on deposits made after October 1.