A host of changes related to taxes and other financial rules have come into effect from April 1, 2023. These rules pertain to matters ranging from income tax to various savings schemes. Here are six major changes that will affect you as an investor or taxpayer.
1. No long-term capital gains (LTCG) tax benefit for debt mutual funds
From April 1, capital gains from debt mutual fund schemes that invest less than 35% in Indian equities will be part of the investor’s income. Tax will be imposed depending on the investor’s income slab.
Also read: UPI charges from April 1: What customers need to know
2. Senior Citizen Savings Scheme (SCSS) and Post Office Monthly Income Scheme (POMIS)
According to the Union Budget, the maximum limit under the SCSS has been doubled to Rs 30 lakh from Rs 15 lakh. Under this scheme, interest is paid on a quarterly basis. For the April-June 2023 quarter, the government has increased the interest rate to 8.2% from 8%.
For POMIS, the investment limit has been raised to Rs 9 lakh from Rs 4.5 lakh. For joint accounts, the limit has been increased to Rs 15 lakh from Rs 9 lakh. The interest payout for January-March 2023 is 7.1%, which is paid monthly. Both schemes have a five-year tenure.
3. New tax regime
The new tax regime will henceforth be the default regime if taxpayers do not state the regime they wants to submit their returns under. While the old regime slabs remain as they are, the new ones are the following:
Up to Rs 3 lakh: no tax
Rs 3-6 lakh: 5%
Rs 6-9 lakh: 10%
Rs 9-12 lakh: 15%
Rs 12-15 lakh: 20%
More than Rs 15 lakh: 30%
No tax for total income not exceeding Rs 7 lakh, thanks to tax rebate available under Section 87A of the Income Tax Act, 1961
Also read: Credit card payments on foreign tours to be brought under LRS to ensure TCS compliance
4. National Pension Scheme (NPS)
The pension regulator, Pension Fund Regulatory and Development Authority (PFRDA), has made the uploading of certain documents mandatory for faster annuity payments faster. The documents that need to be uploaded are the NPS exit/withdrawal form, bank account detail proof, and a copy of the Permanent Retirement Account Number card. All these documents need to be uploaded on the central record-keeping agency’s website. The account holder can withdraw 25% of one’s contribution after completing five years in the tier-one account of NPS. One can withdraw only three times during the investment period.
5. Hallmark Unique Identification (HUID) number
From April 1, 2023 onwards, jewellery shops can sell only hallmarked gold jewellery with a Hallmark Unique Identification (HUID) number. The number is a six-digit alphanumeric code. This move should lead to better transparency for jewellery buyers.
6. A 20% tax for spending when abroad
A 20% tax will be imposed on every dollar (or any currency) spent while travelling abroad. One can adjust it against other taxes payable or claim a refund. The immediate impact is that there will be an extra 20% outflow of cash. The better option is to buy currency in India itself before going abroad.
(With agency inputs)