Due to the current situation and losses causes caused to the economy due to the pandemic COVID-19, various tax changes have been made to the taxation rules by the Central Board of Direct Taxes, Government of India. Such rule changes shall affect the taxpayers, depositors, investors as well as the common man and shall come into effect from October 1, 2020.
List of Rule Changes that Are effective from October 1, 2020
– TCS on foreign remittances through Liberalized Remittance Scheme(LRS)
Under this rule, the TCS shall be collected if the amount exceeds the specified limit. As per the amended Income Tax laws, TCS shall be applicable on foreign remittances under the Reserve Bank of India’s (RBI) LRS, if the total amount exceeds Rs. 7 lakhs in a financial year. The rate of TCS is 5%, if PAN/Aadhaar Card is furnished and 10%, if PAN/Aadhaar Card is not furnished.
– TCS on overseas tour packages
Under this rule, the TCS shall be collected on remittance for buying an overseas tour package. There is no limit amount for levying of TCS on overseas tour package. The TCS shall be collected @5%, if PAN/Aadhaar Card is furnished and @10%, if the PAN/Aadhaar Card is not furnished.
– TCS on sale of goods
Under this rule, the TCS shall be deducted if the sale of goods exceed Rs. 50 lacs and turnover exceeds Rs. 10 crores for the financial year 2019-2020 and onwards. The TCS shall be collected @0.1% of the sale, if PAN/Aadhaar is furnished and @1%, if the PAN/Aadhaar Card is not furnished.
– Health Insurance Premium
Taxation rules that governs the health insurances have certain amendments that will take effect from October 1, 2020. Through this rule, if the policy holder have a premium for 8 years, then the insurance company cannot reject the claim, if there is any loophole in the claim. The rejecction or acceptance of the policy will be made within 30 days of the claim. Also, now the health insurance premium covers more diseases and thereby, the cost of the insurance premiums may get hiked.
Another List Of tax changes Rule
– Debit and Credit Card Rules
Under the newly amended rule, the Reserve Bank of India has directed the banks to not to give international facilities to customers unless they themselves opt for the same. The card holders will now get an option to opt-in or opt out facility, spend limits and various other services for online, international and contactless transactions.
– No discount at fuel stations for credit card holders
From October 1, 2020, there will be no discount at fuel stations for credit card holders. However, the discounts for debit card holders and on payments through other wallets shall continue to exist.
– Buying LPG connection will be costly
Earlier, under the Pradhan Mantri Ujjwala Yojana, the LPG connections were given free to people falling under the specified category. However, from October 1, 2020 the process of availing free LPG connection will come to an end.
– TCS and TDS for e-commerce
Under the newly amended rule, as directed by the Central Board of Direct Taxes, the rules of Tax Deducted at Source and Tax Collected at Source shall come into effect from October 1, 2020. Under this rule, the tax rate shall be applicable on sale of products more than Rs. 50 lacs, with an exemption to individuals and HUFs who gets less than Rs. 5 lacs and furnishes PAN/Aadhaar Card.
– Buying of open panels products will be expensive
From October 1, 2020 open-cell panels will attract 5% import duty with the government saying that a duty exemption expiring at the end of this month will not be extended. As part of ‘Atmanirbhar Bharat’ the government is keen to expand domestic production capacity for open cell panels so that imports can be curbed.
Please note that the above tax changes rules are as indicated by the Central Board of Direct Taxes, Government of India. The rules have been explained in a simple language for better understanding!