Revised TDS rates, STT, Aadhaar card rules:

6 income tax Budget 2024 changes applicable from October 1, 2024

Several significant changes to your income taxes will take effect on October 1. In the Union Budget 2024, there were few changes made to Aadhaar card, STT, TDS rate, Direct Tax Vivad Se Vishwas Scheme 2024.

The proposed changes were passed in the Finance Bill.

Here is a look at important tax changes that will come into effect from October 1, 2024.

1. STT

The 2024 budget has increased the securities transaction tax (STT) on Futures & Options (F&O) of securities to 0.02 percent and 0.1 percent respectively and income receipts from share buybacks would be taxed in the hands of beneficiaries.

This amendment is passed and to be made effective from October 1, 2024.

2. Aadhaar

In order to prevent PAN misuse and duplication, effective October 1, the provisions that permit citing an Aadhaar Enrollment ID in lieu of an Aadhaar number, Aadhaar in ITRs, and PAN applications will no longer be applicable.

Aadhaar enrollment ID won't be accepted in lieu of Aadhaar in ITR, PAN application from this date to plug PAN misuse, duplication

3. Buy-back of shares

As of October 1, buyback of shares will be subject to shareholder-level taxes, much like dividends. This will result in a higher tax burden for investors. Additionally, the shareholder's acquisition costs of these shares will be taken into account when calculating any capital gains or losses.

4. Floating rate bonds TDS

In Budget 2024, it was announced that starting from October 1, 2024, tax deducted at source (TDS) will be deducted at a 10% rate from specified central and state government bonds, including floating rate bonds.

There is a Rs 10,000 threshold limit, after which the tax is deducted. This means that there is no TDS if the revenue earned throughout the year is less than Rs 10,000.

Budget 2024 proposed 10% TDS on government bonds: You can still pay lower or zero TDS with this certificate

5. TDS rates

The TDS rates proposed in the Union Budget 2024 were approved in the Finance Bill:

The TDS rate for payments under sections 19DA, 194H, 194-IB, and 194M was reduced from 5% to 2%. TDS rate reduction for e-commerce operators: The TDS rate for e-commerce operators was reduced from 1% to 0.1%.

• Section 194DA - Payment in respect of life insurance policy
• Section 194G -Commission on sale of lottery tickets
• Section 194H - Payment of commission or brokerage
• Section 194-IB - Payment of Rent by certain individuals or HUF
• Section 194M - Payment of certain sums by certain individuals or HUFs
• Section 194F - Payment on account of repurchase of units by mutual funds or UTI is proposed to be omitted from October 1, 2024.

6. Direct Tax Vivad Se Vishwas Scheme 2024

The Central Board of Direct Taxes (CBDT) has announced the Direct Tax Vivad Se Vishwas Scheme, 2024 (also known as DTVSV, 2024) to settle outstanding appeals in cases of income tax disputes.

Starting on October 1, 2024, the aforementioned Scheme will be implemented.

The DTVSV Scheme provides for lesser settlement amounts for a ‘new appellant’ in comparison to an ‘old appellant’. The DTVSV Scheme also provides for lesser settlement amounts for taxpayers who file declaration on or before December 31, 2024 in comparison to those who file thereafter.

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