Budget 2024: 6 income tax rules that will be effective from October 1; check details

As we are set to bid farewell to September and enter a new month, Union Finance Minister Nirmala Sitharaman has introduced six income tax rules effective from October 1.

While some of the tax rules introduced in the Union Budget 2024 are already effective, these six norms will be applicable from October 1, 2024:

1. Direct Tax Vivad Se Vishwas Scheme 2024: The Vivad se Vishwas scheme will be implemented starting October 1, offering taxpayers an opportunity to settle specific pending tax disputes. Taxpayers who have ongoing disputes regarding tax, interest, penalties, or fees before appellate bodies, high courts, or the Supreme Court are eligible to participate in this scheme.

2. Aadhaar Card: Starting from October 1, people will no longer be able to quote their Aadhaar Enrolment ID in the application form for PAN allotment and in their income tax returns. The decision aims to address PAN misuse and duplication issues. Instead of Aadhaar Enrolment, individuals have to use Aadhaar number in the application form for PAN.

3. STT: STT is imposed during the buying and selling of various securities, including equity shares, futures and options. From October 1, the Securities Transaction Tax (STT) is applicable to futures and options (F&O) trading is all set to increase. The tax rates will rise to 0.02%.

4. TDS rate: Effective from October 1, a TDS of 10% will be applicable to central and state government bonds. TDS will be deducted once the income surpasses the Rs 10,000 threshold limit. As per Budget 2024, TDS is imposed on the Floating Rate Savings Bond and other security issued by the Central or State Government.

5. TDS rates: TDS rates for payments under sections 19DA, 194H, 194-IB and 194M have been reduced. The reduced rates are now 2% of the previous 5% for these sections.
> Section 194DA - Payment for life insurance policy
> Section 194G - Commission on lottery tickets' sale
> Section 194H - Commission or brokerage

6. Buyback of shares: Effective October 1, shareholders will be responsible for paying taxes on buyback proceeds. The change will transfer the tax burden from companies to shareholders.