Today marks the end of June, and from July 1 onwards, i.e., tomorrow, there will be a slew of changes affecting your financial life. It is safe to keep in mind that July 1 also marks the start of the second quarter of the fiscal year. The financial changes concern taxation, the stock market, and your pay structure. Here’s a brief of the changes to be effective from July 1.
1] TDS On Cryptocurrency Transactions
With effect from July 1, 2022, the Finance Act of 2022 has added a new provision, Section 194S, to the Income Tax Act, 1961. This clause requires the buyer of a virtual digital asset (VDA) to guarantee that tax is deducted at source (TDS) at a rate of 1 per cent of the transaction price.
The income tax department has said the reason for this is that VDA transactions take place through an exchange, and the exchange is merely the intermediary, and not the buyer.
2] PAN-Aadhaar Linkage Will Become More Expensive
Those who have not yet linked their PAN and Aadhaar would be fined Rs 1,000 if they attempt to link both after July 1. The penalties is limited to Rs 500 until June 30. The Central Board of Direct Taxes (CBDT) has extended the deadline for linking PAN-Aadhaar to March 23, but anyone who does so on or after July 1 would face a penalty of Rs 1,000.
3] New Labour Laws
Several facets of employment and work culture are predicted to alter if the new labour regulations are enacted, ranging from working hours to in-hand compensation. After receiving the President’s consent, the four main codes on salaries, industrial relations, social security, and occupational safety, health, and working conditions (OSH) were announced. However, in order to implement these four codes, the rules must be alerted.
Here’s how the new labour laws are expected to affect the working class:
Four-day workweek: Employees hoping for fewer number of working days per week may have reason to rejoice if their company allows them to work for four days instead of five. The flipside is that their work hours will get extended to compensate for the extra day of leave.
Work timings: If an employee works fewer days per week, the number of work hours will increase as a result. The new labour code requires a 48-hour work week. As a result, the number of labour hours each day will skyrocket.
Contribution to PF and gratuity: The new labour regulation will boost an Employee’s Provident Fund (EPF) contribution. The new laws require that an employee’s basic wage be at least 50 per cent of their gross monthly compensation, resulting in an increase in PF contributions made by both the employees and the employers.
As a result, the worker’s retirement corpus and gratuity amount will increase.
4] Compulsory Demat Account Tagging
The deadline for completing your know your customer (KYC) norms for your demat account is June 30, after which the account will be cancelled. You must update your KYC with information, such as your name, residence, PAN, valid mobile number, income range, and valid email address. If this is not done, your demat account will be made inactive from July 1.
5] Taxation Of Social Media Influencers And Physicians
Doctors, YouTubers, and influencers who accept free products from firms will be required to pay taxes on such things beginning July 1. Social media influencers will be required to pay 10 per cent TDS if they receive and keep a product, such as a car, mobile phone, or clothing. Section 194R of the Income Tax Act, 1961 does not apply if the product is returned to the corporation after using the same.
6] Sebi’s New Notification On Investment Pool
Mutual fund investments cannot be started from a pool account as of July 1. The money must first be transferred from the investor’s bank account to the bank account of the mutual fund house, according to the Securities and Exchange Board of India (Sebi). The implementation of this across all stock exchange-led transaction platforms may initially have unsettling consequences for investors and other stakeholder groups.
The Sebi has also directed mutual fund houses to ensure that no distributor, online platform, stockbroker, or investment advisor collects funds from investors in a bank account and then transfers those funds to the fund house to purchase units in schemes on their behalf. This is to ensure that the money is not taken improperly.