TDS on Crypto, PAN-Aadhaar Link and Working Days, Among Other Changes Effective July 1
Today marks the end of June and starting July 1, which is tomorrow, many changes will affect your financial life. It is prudent to keep in mind that July 1 also marks the start of the second quarter of the financial year. The financial changes concern taxation, the stock market and your salary structure. Here is an overview of the changes that will take effect on July 1.
1]TDS on cryptocurrency transactions
With effect from July 1, 2022, the Finance Act 2022 added a new provision, Section 194S, to the Income Tax Act 1961. This clause obliges the buyer of a virtual digital asset (VDA) to ensure that tax is deducted at source (TDS) at the rate of 1 percent of the transaction price.
The income tax department said the reason is that VDA transactions take place through an exchange, and the exchange is only the intermediary, not the buyer.
2]The PAN-Aadhaar link 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 the two after July 1. Penalties are limited to 500 rupees until June 30. The Central Board of Direct Taxes (CBDT) has extended the deadline for linking PAN-Aadhaar to March 23, but anyone doing so on or after July 1 would face a Rs 1,000 fine.
3]New labor laws
Several facets of employment and work culture are expected to change if the new labor regulations are enacted, ranging from working hours to pay on hand. After receiving the President’s approval, the four main codes on wages, industrial relations, social security and safety, health and working conditions (OSH) were announced. However, to implement these four codes, the rules must be alerted.
Here is how the new labor laws should affect the working class:
Four-day work week: Employees hoping for fewer days of work per week may have reason to celebrate if their company allows them to work four days instead of five. The flip side is that their working hours will be extended to compensate for the extra day off.
Working hours: If an employee works fewer days per week, the number of working hours will increase accordingly. The new labor code imposes a 48-hour work week. As a result, the number of working hours each day will skyrocket.
Contribution to the FP and gratuity: The new labor regulations will boost a contribution to the employee provident fund (EPF). The new laws require an employee’s base salary to be at least 50 percent of their gross monthly earnings, resulting in increased PF contributions paid by both employees and employers.
As a result, the worker’s pension corpus and the amount of gratuity will increase.
4]Compulsory marking of Demat account
The deadline to complete your know-your-customer (KYC) standards 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 bracket and valid email address. If this is not done, your demat account will be made inactive from July 1st.
5]Taxation of social media influencers and doctors
Doctors, YouTubers and influencers who accept free products from companies will have to pay taxes on those things starting July 1. Social media influencers will be required to pay 10% 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 company after use.
6]New notification from Sebi on investment pool
Investments in mutual funds cannot be initiated from a pool account from July 1. The money must first be transferred from the bank account of the investor to the bank account of the mutual fund company, according to the Securities and Exchange Board of India (Sebi). Implementing this on all exchange-led trading platforms may initially have worrisome consequences for investors and other stakeholder groups.
The Sebi also ordered mutual fund companies to ensure that no distributor, online platform, stockbroker or investment adviser collects funds from investors into a bank account and then transfers these funds to the fund company to purchase shares in programs on their behalf. This is to ensure that money is not taken inappropriately.