NEW DELHI: A revision in certain taxation, stock market and labour norms may come into effect from July 1.
While, the Centre is certain in its plan to impose tax on capital gains made on cryptocurrency transactions, it has not given any confirmation on implementation of new labour codes.
Here are few such changes:
* Tax on cryptocurrency, virtual digital assets
The Union Budget 2022-23, presented on February 1 earlier this year, laid out provisions for tax deducted at source (TDS) on virtual digital assets (VDA) or crytocurrencies from July 1.
A 1 per cent TDS on payments over Rs 10,000 towards virtual currencies has also been introduced, which will kick in from July 1. The threshold limit for TDS would be Rs 50,000 a year for specified persons, which includes individuals/HUFs who are required to get their accounts audited under the I-T Act.
From April 1, a 30 per cent I-T plus cess and surcharges, is levied on such transactions in the same manner as it treats winnings from horse races or other speculative transactions.
On June 22, the Central Board of Direct Taxes (CBDT) issued a circular explaining how tax will be deducted on transfer of VDAs and cryptocurrencies.
* Buyer to deduct TDS on peer-to-peer VDA transactions
The income tax department said both buyer and seller will have to withhold taxes for transactions involving an exchange of one virtual asset for another.
Issuing a further set of clarification, the Central Board of Direct Taxes (CBDT) also said according to section 194S of the I-T Act, the buyer will have to deduct tax in a peer-to-peer transaction of virtual digital assets (VDA).
"Thus, in a peer-to-peer (ie buyer to the seller without going through an Exchange) transaction, the buyer (ie person paying the consideration) is required to deduct tax under section 194S of the Act," the CBDT said.
With regard to liability to deduct tax at source under section 194S of the Act when the consideration is in kind or in exchange of VDA, the CBDT said in this situation, the person responsible for paying such consideration is required to ensure that the tax required to be deducted has been paid in respect of such consideration, before releasing the consideration.
* PAN-Aadhaar linking to cost more
In a notification on March 29, the CBDT had announced yet another extension of deadline to link permanent account number (PAN) with Aadhaar till March 31, 2023. However, this time the extension is going to cost people who did not link the same.
A penalty of Rs 500 is being charged till June 30 from people who missed the earlier deadlines. This penalty amount will be hiked to Rs 1,000 if PAN-Aadhaar link is completed on or after July 1, 2022.
The income tax (I-T) department offeres various ways to link PAN with Aadhaar. These include directly from tax e-filing portal, SMS, manually by visiting NSDL/UTIL offices.
* Changes in TDS/TCS rules
Earlier this month, the CBDT issued guidelines on the applicability of new TDS provision regarding benefits received in a business or profession and said that such perquisites can either be in cash or in kind or partly in both of these forms.
The budget brought in a new section, 194R, in the I-T Act which requires deduction of tax at source at the rate of 10 per cent by any person, providing any benefit or perquisite exceeding Rs 20,000 in a year to a resident, arising from the business or profession of such resident.
CBDT clarifies that in case of doctors receiving free samples of medicines while employed in a hospital, Section 194R would apply on distribution of free samples to the hospital. The hospital as an employer may treat such samples as taxable perquisite for employees and deduct tax under Section 192. In such cases, the threshold of Rs.20,000 has to be seen with respect to the hospital.
* Mandatory tagging of demat accounts
Last week, capital markets regulator Sebi had said all demat accounts of stock brokers, which are untagged, need to be appropriately tagged by June-end.
Credit of securities will not be allowed in any demat account left untagged from July 1 onwards. However, credits on account of corporate actions will be permitted, the Securities and Exchange Board of India (Sebi) said in a circular.
Tagging of bank and demat accounts reflect the purpose for which those bank/demat accounts are being maintained and the reporting of such accounts to the stock exchanges/depositories.
Sebi further said that debit of securities will also not be allowed in any demat account left untagged from August.
* New labour codes likely to be implemented
Although the Centre has made no official announcement on implementation of new labour codes yet, speculations are high that they may come into effect from July 1. If implemented, it might mean reduction in no. of working days for employees, in addition to a rise in take home pays.
- Less working days more hours: The new labour code proposes to reduce number of working days in a week for employees. As per it, work days may be reduced to 4 days from 5 at present.
However, it will lead to an increase in daily working hours. The provision requires a 48-hour working week, which means an employee will have to work 12-hour shift daily instead of the usual 9-hour shift.
- Increased provident fund (PF): As per the new law, basic salary of an employee will be at least be 50 per cent of their gross (overall) monthly salary. This will lead to an increase in the PF contribution made by employees and their employers.
- Earned leave policy: The leave policy as per the new labour code allows employees to cash up to 300 holidays on carry forward basis. However, the labor union is demanding to increase the number of holidays to 450.
Government departments now allow 30 holidays in a year. However, defense employees get 60 holidays in 1 year.
* Delhi to go plastic-free:
The Delhi government has decided to shut down all units dealing in single-use plastic (SUP) items from July 1.
The identified SUP items include earbuds, plastic sticks for balloons, flags, candy sticks, ice-cream sticks, polystyrene (thermocol), plates, cups, glasses, forks, spoons, knives, straws, trays, wrapping or packaging films around sweets boxes, invitation cards, cigarette packets, plastic or PVC banners less than 100 micron, and stirrers.
The Delhi environment department will also run a campaign to ensure compliance with the ban on 19 identified single-use plastic items starting July 1 and close down all manufacturers, suppliers, stockists, dealers and sellers found violating the orders, officials said.
(With inputs from PTI)
