Income Tax Updates: 7 Major Changes in TDS Rates, STT and Aadhaar Amendments Applicable from October 1 2024

Starting October 1, 2024, several important changes in tax rules will take effect in India, covering TDS rates, STT, and Aadhaar usage:

Securities Transaction Tax (STT): 

The STT on futures will rise to 0.02% while on options it will rise to 0.1%. Also, dividends received through repurchases will be taxed at the shareholder level as is the case with dividends.     

Aadhaar Rules: 

Now the Aadhaar enrolment ID cannot be used as an Aadhaar number to file income tax returns (ITR) or for PAN applications. This is to eliminate cases of duplicity and / or fraudulent use of the PANs.

TDS on Life Insurance Payouts: 

TDS on maturity benefits in life insurance business has been reduced to 2 percent from 5 percent thereby permitting policy holders availing of maturity amounts to keep a higher proportion with them.

Tax on Share Buybacks: 

Dividend buybacks will now be taxed under the shareholder tax regime. That means capital gains or losses of investors will be based on the cost of the stocks bought and held by the investors.

TDS on Floating Rate Bonds: 

An additional 10% TDS will be levied if the income is earned from specific central and state government bonds where the income in the FY from such bonds is more than ₹ 10,000.

Reduced TDS Rates: 

Thus, decision rules of TDS have released some categories by reducing the rates like life insurance claim, commission, rent, etc., and deals of e-commerce site. For example, the TDS on e-commerce has been lowered from 1 percent to 0.1 percent;