Several important changes to your income taxes will take effect on October 1, 2024, as part of the Union Budget 2024.
These changes include updates related to the Aadhaar card, Securities Transaction Tax (STT), Tax Deducted at Source (TDS) rates,
and the Direct Tax Vivad Se Vishwas Scheme 2024. These proposals have been approved in the Finance Bill.
Overview of Tax Changes
Securities Transaction Tax (STT)
The budget has increased the STT on Futures & Options (F&O) of securities. The new rates will be 0.02% for Futures and 0.1% for Options.
Additionally, income from share buybacks will now be taxed in the hands of the beneficiaries.
Aadhaar Card Requirements
To prevent misuse and duplication of the Permanent Account Number (PAN), starting October 1,
you will no longer be able to use an Aadhaar Enrollment ID in place of an Aadhaar number for Income Tax Returns (ITRs) or PAN applications.
Additional Tax Changes
Tax on Share Buybacks
From October 1, the buyback of shares will be taxed at the shareholder level, similar to dividends.
This means that investors will face a higher tax burden. Also, the acquisition costs of these shares will be considered when calculating capital gains or losses.
Floating Rate Bonds and TDS
Beginning October 1, TDS will be deducted at a rate of 10% from certain central and state government bonds, including floating rate bonds.
A threshold of Rs 10,000 is set, meaning no TDS will be deducted if your earnings for the year are below this amount.
Updated TDS Rates
The proposed TDS rates from the Union Budget 2024 have been approved. The rates for payments under various sections have been reduced:
1) TDS for payments under sections 194H, 194-IB, and 194M has decreased from 5% to 2%.
2) TDS for e-commerce operators has decreased from 1% to 0.1%.
3) Section 194F, which involves mutual funds or UTI repurchase payments, will be removed starting October 1.
Direct Tax Vivad Se Vishwas Scheme 2024
The Central Board of Direct Taxes (CBDT) will implement the Direct Tax Vivad Se Vishwas Scheme 2024 on October 1, 2024.
This scheme aims to settle outstanding income tax disputes.
Under this scheme, new appellants will have lower settlement amounts compared to older appellants.
Furthermore, taxpayers who submit their declarations by December 31, 2024, will also benefit from lower settlement amounts than those who file later.
