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From the deadline for filing belated or revised income tax return (ITR) being pushed to the Reserve Bank of India’s (RBI) new guidelines for credit and debit cards, quite a few recent developments will affect taxpayers, investors and consumers. We list the five main changes to keep in mind.
Belated/revised ITR filing deadline extended: The Central Board of Direct taxes has extended the deadline for filing belated or revised ITR to 30 November 2020 from 30 September. This move was made taking into consideration the difficulties faced by taxpayers in completing their ITR formalities in the wake of covid-19.
RBI’s new card guidelines kick in: RBI’s new guidelines to secure payments through debit and credit cards came into effect on 1 October. These include enabling international transactions on a card if the customer requests it, turning off the online payment option for cards that have not been used for contactless or online payments since issuance, and allowing customers to set spending limits on cards.
TCS on foreign remittances over ₹7 lakh: A 5% tax collected at source (TCS) has become applicable to foreign remittance in excess of ₹7 lakh. This change was introduced in budget 2020 and came into effect on 1 October under RBI’s Liberalised Remittance Scheme.
Payments for foreign tour packages will also be subject to this TCS. However, if you fail to provide your PAN or Aadhaar to the authorized dealer, the TCS rate will be bumped up to 10%. If the amount is remitted for the purpose of pursuing education through a loan obtained from a financial institute, the applicable rate of TCS will be 0.5% on the amount exceeding ₹7 lakh.
“Going forward, insurers will be barred from excluding illnesses contracted due to hazardous activity. Also, treatment for mental illness, age-related degeneration, internal congenital diseases, genetic diseases and disorders, among others will be covered," said Amit Chhabra, head, health insurance, Policybazaar.com.
Small savings rates unchanged: Small savings rates have remained unchanged for October-December 2020. According to a circular issued by the finance ministry on 30 September, the Public Provident Fund will earn 7.10%, the Senior Citizen Savings Scheme 7.40% and post office deposits between 5.5% and 6.7%.
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