Dust from Budget has settled, its time when mid-year changes in taxation & changes in investments are rolled out. For September 1, these new 7 changes will have an immediate and lasting impact on how we deal with money. So here are the 7 Changes in Personal Finance w.e.f. September 1, 2019.
Changes in Taxation from September 2019
- From September 1, while buying a property, you will have to include the payment made for other services or amenities such as club membership fee, car parking fee, electricity and water facility fee and so on when computing the amount paid for the property for the purpose of deducting TDS.
Changes in taxation – the TDS rate will be 1%.
2) Cash withdrawals exceeding Rs 1crore on aggregate basis during the year from an account held with a bank, cooperative bank or post office will invite levy of TDS from September 1. The move is aimed at discouraging large cash transactions and also to promote a less-cash economy.
This is a newly introduced section 194N.
The rate of TDS will be 2%.
3) From September 1, individuals and HUFs making a payment to contractors and professionals exceeding Rs 50 lakh in aggregate per annum will also be required to deduct TDS.
This is newly introduced section 194M.
The rate of TDS will be 5%.
4) If life insurance maturity proceeds received by you are taxable in your hands, then TDS will be deducted at the rate of 5% on the net income portion. The net income portion is defined as the total sum received less of total amount of insurance premium paid.
TDS is applicable when maturity proceeds exceed Rs 1 Lakhs.
Maturity is taxable when:
- The annual premium paid on the insurance policy is more than 10% of the sum assured.
- For insurance policies purchased before April 2012, the premium must be less than 20% of the sum assured.
5) Banks and other financial institutions are required to report specified financial transactions if the amount exceeded the threshold limit of Rs. 50,000/-. The Government has not removed that limit and can direct the Banks and financial institutions to report any or all transactions which can be in turn verified with your returns filed.
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6) PAN will now become inoperative but not invalid if not linked with Aadhaar by the specified deadline.
7) Aadhaar can be quoted in lieu of PAN only for certain prescribed transactions. Though the new law comes into effect from September 1, the government is yet to notify the certain prescribed transactions. Today you need to provide Pan in case you deposit or withdraw cash above Rs 50000. Noe if you do not have PAN, you can quote Aadhaar.
So these were the changes in taxation and other personal finance matters.
Hope you will remember and incorporate in your dealings.
Do share your views & queries in the comments section below.
