Set of possible developments in Financial Paradigm
Starting in October 2024, several critical financial changes will impact various sectors, making it crucial for individuals and businesses to stay updated
The government has introduced new financial rules for National Small Savings (NSS) and Public Provident Fund (PPF) accounts, effective October 1. Notably, non-resident Indians (NRIs) who hold PPF accounts without disclosing their status will no longer earn interest, which is a move aimed at ensuring compliance with residency requirements. Additionally, premium HDFC Infinia credit cardholders will see restrictions on redeeming reward points, particularly for Apple products and Tanishq vouchers, with specific quarterly caps being implemented. In the lending space, introducing the Key Facts Statement (KFS) for loans will give borrowers greater clarity on their loan terms, including all related costs, fees, and charges. This will help ensure transparency for banks and non-banking financial companies (NBFCs). Health insurance policyholders will benefit from changes introduced by the Insurance Regulatory and Development Authority of India (IRDAI).
The moratorium period for contesting claims has been reduced from eight to five years, while the waiting period for pre-existing conditions has been shortened from four to three years, making policies more customer-friendly. Significant tax changes are also on the horizon. The 20% Tax Deducted at Source (TDS) on mutual fund repurchases will be eliminated, easing the tax burden for investors. Additionally, the ‘Direct Tax Vivad Se Vishwas Scheme’ will facilitate faster resolution of tax disputes, allowing taxpayers to settle disputes at lower amounts. Furthermore, changes to share buyback taxation will shift the tax liability from companies to shareholders, impacting how buybacks are taxed. Lastly, bonus shares issued after October 1 will be available for trading within two days of the record date. Employees holding Employee Stock Options (ESOPs) will face higher taxes on buybacks, as these proceeds will be taxed as dividend income.
