Financial Changes from July 1: The month of July is about to begin, which means there will be a host of changes that will affect your financial matters. It should also be noted in this regard that July 1 also marks the start of the second quarter of the financial year, which means that there will be a host of rule changes regarding financial matters this month. From credit card rule change, income tax rule change, to TDS on cryptocurrencies, a whole host of new financial rules in July are about to take hold.
Here are five key changes to the financial rules effective July 1, 2022:
Change in credit card rules
Starting July 1, the rules around credit card closing, billing cycle and the like are expected to undergo a change. The RBI has notified these rules under the Reserve Bank of India (Credit Card and Debit Card – Issuance and Conduct) that credit card companies cannot send unwanted credit cards to customers. Other than that, your credit card billing cycle will start on the 11th day of the previous month and end on the 10th day of the current month as per the RBI guideline. If the credit card is not closed at the request of the client within seven working days, the company will be liable to pay Rs 500 per day to the client until the time of closing.
PAN-Aadhaar linking fine to increase
Those who have not yet linked their PAN Aadhaar will have to pay a fine of Rs 1,000 if they attempt to link the two documents from July 1. Till June 30, the fine has been capped at Rs 500. The Central Board of Direct Taxation has extended the deadline for linking PAN-Aadhaar to March 23, but people will have to pay a fine of Rs 1,000 if done July 1 or later.
TDS on cryptocurrencies
The Central Board of Direct Taxes (CBDT) has issued detailed guidelines on levying withholding tax (TDS) on virtual digital assets (VDAs) or cryptoassets. The new rules will come into effect on July 1. Finance Minister Nirmala Sitharaman has introduced the provision of a 1% withholding tax levied on payments made when transferring virtual assets.
“The new section (Section 194S) requires a person, who is liable to pay any resident any sum in consideration for the transfer of a virtual digital asset (VDA), to deduct an amount equal to 1% of such sum as the income tax thereon. The tax deduction shall be made at the time of crediting this sum to the resident’s account or at the time of payment, whichever comes first,” the CBDT said in a notification.
Income tax rule change for doctors and influencers
Doctors, influencers and others who receive free items from companies will have to pay taxes to receive them starting July 1, the income tax department said. The Finance Act 2022 inserted a new Section 194R into the Income Tax Act 1961, under which those in receipt of benefits will have to pay TDS at the rate of 10%.
Changing the Demat KYC Rule
The deadline to complete your KYC for demat account is June 30, after which the account will be deactivated. You need to update your KYC with details like name, address, PAN, valid mobile number, income bracket and valid email id. If this is not done, from Juky 1, your demat account will be rendered invalid.
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