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New regulations that will be effective from 1st September

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New regulations that will be effective from 1st September

Many changes will be introduced in India from September 1, 2019 which will affect our regular life to a great extent. The important finance related changes to be made effective are as follows

  1. TDS applicable on immovable property

When you buy a property, payments such as car parking fees, electricity fee, club membership fee, water facility fee, advance fee, maintenance fee and others will be included in its cost price while making calculations for the amount of tax to be subtracted during the time of payment for the property.

While buying an immovable property, there will be a deduction of TDS (Tax Deducted at Source) at a rate of 1 per cent of purchase price by the buyer provided the cost price of the property exceeds Rs. 50 lakhs. This will come into effect from September 1.

  1. 2% TDS on cash withdrawals of over Rs. 1 crore

From September 1, if cash amounting to Rs, 1 crore or more is withdrawn from banks or post office, tax will be deducted at a rate of 2 per cent. This provision of imposing TDS at a rate of 2 per cent on the event of such large amount of cash withdrawals had been made by the government in the Budget 2019 in order to put a stop to transactions by cash and promote a cash less economy.

According to the Central Board of Direct Taxes (CBDT), if there had been a withdrawal of cash amounting to Rs. 1 crore or more, up to August 31, 2019, the deduction of 2 per cent TDS will be apply on succeeding cash withdrawals.

  1. Application of TDS on Payments to contractors or professionals

If a buyer makes a payment amounting to more than Rs. 50 lakhs in a year to a professional or contractor or brokerage, deduction of TDS at a rate of 5 per cent is required to be made by that person or a Hindu Undivided Family (HUF) at the time of paying the sum.

  1. Deadline to link PAN- Aadhar

If the PAN card have not been linked with the Aadhar cards by September 1 2019, the older PAN card will be invalidated a new PAN will have to be issued.

  1. Service charges restored on e-tickets

There will be a rise in the price of e-tickets bought through IRCTC due to the imposition of service charges from September 1 as decided by the Indian Railways. For non AC classes, service charge of Rs. 15 will be deducted and for AC classes including first class, service charge of Rs. 30 will be imposed by the IRCTC. This service charge does not include Goods and Service Tax and they will be applicable separately.

  1. India Post Payment Bank to be introduced

On September 1, 2019, the India Post Payments Bank (IPPB) will be launched by Prime Minister Narendra Modi. Every district will have at least one branch of IPPB which will concentrate on the betterment of financial services in rural areas. This will generate the largest network of banks in the country due to its direct presence even at the village level. With the association of third party, financial services can be availed by account holders in IPPB as in the case of regular banking customers. MNREGA wages, subsides, pensions etc. can be distributed by the government through the payment bank.

  1. SBI home and auto loans to be repo-linked

At interest rates beginning from 8.05 per cent, State Bank of India (SBI) auto loans and home loans will be repo-linked from September 1 2019. This implies that any changes made to the key interest rate by the RBI will be passed on to the customers directly. This new rate of interest will be applicable to all new loans as well as existing loans.

  1. New insurance introduced for buyers of new vehicles

Long term third party insurance will be offered by all general insurers on vehicles sold from September 1 onwards. In third party insurance, more than Rs. 24,000 will have to be paid by buyers for new cars and more than Rs. 13,000 is required to be paid for new motorcycles.

  1. Deadline to update KYC

Before August 31, KYC is required to be completed for those who are availing the services of PhonePe, GooglePay, Paytm and other mobile wallets. From September 1, 2019, all accounts of mobile wallets will be blocked by the central bank in case a person fails to do so.

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