Here Are the New Rules, Charges for Financial Transactions Applicable from 1st July
Several changes have kicked in from 1 July 2020 for financial transactions that will directly impact consumers at all levels. This includes limiting number of free transactions at automated teller machines (ATMs) and paying stamp duty on purchases of mutual fund units.
Other changes include provident fund (PF) rules, Atal Pension Yojana, registration in Kisan Samman Nidhi and penalty for not maintaining minimum balance for savings account in banks, among others.
In March, finance minister (FM) Nirmala Sitharaman had announced a waiver on charges for three months till 30th June on ATM transactions, no penalty for minimum balance in savings account while halting auto debit for pension scheme. In addition, the government had allowed withdrawal from PF account and extended the Sabka Saath Sabka Vikas tax benefit scheme till 30th June.
Investors will also have to pay stamp duty on purchasing mutual funds from 1st July. Even if you are investing in mutual funds through systematic investment plan (SIP) and systematic transfer plan (STP), you still have to pay stamp duty.
However, investors will not have to pay stamp duty on the withdrawal of mutual funds. This stamp duty will be levied on all types of mutual funds. The effect of stamp duty will be seen most on debt funds.
Purchase of mutual funds will attract stamp duty at 0.005%. Apart from this, transfer of units of mutual funds from demat account will attract stamp duty of 0.015%. The imposition of stamp duty will affect the holding of 90 days and less.
In view of the scarcity of cash with the people, the finance ministry had provided emergency withdrawal facility from the EPF and the last day of application is on 30th June. Shareholders could withdraw an amount which was less than thrice the basic salary and dearness allowance or 75% of the total deposit amount.
In addition, the bank ATM cash withdrawal rules are changed from 1st July and all transaction except first few or limited by the banks, would be charged. During lock-down, norms for cash withdrawals from a bank ATM were relaxed but are now going to be tightened. The relaxation was announced for three months—April, May, June—and the deadline ended on 30th June. If there is no extension announced, then the old ATM withdrawal rules will get reinstated.
From 1st July, ATM transactions would become expensive for all SBI customers.
Also, from July, the rule of no minimum balance in the savings account will end. If the minimum balance is not maintained by the account-holder in the accounts, the bank will charge a penalty on it.
At present, the limit for keeping a minimum balance in a savings account varies for metro city, semi-urban and rural areas and is different for different banks. A minimum balance of Rs3,000 is required in metro cities, Rs2,000 in semi-urban areas and Rs1,000 in rural areas on the accounts of State Bank of India (SBI). At the same time, this amount in HDFC Bank is Rs10,000, Rs5,000 and Rs2,500 respectively.
The Central government has relaxed rules to withdraw money from the Employees' Pension Fund (EPF) during the lock-down imposed for the prevention of coronavirus.
From 1st July, auto debit of monthly contribution will start from Atal Pension Yojana accounts.
The Pension Fund Regulatory and Development Authority (PFRDA) had, in April, directed banks to stop the auto debit of Atal Pension Yojana till 30th June. Now from today, auto debit facility will be started once again.
Most of the subscribers under this scheme are from the lower strata of the society and have been facing severe crunch due to the lockdown. A recent PFRDA notification stated that the penalty interest will not be levied if the subscriber's pension scheme account is regularised before 30th September.
The last date for payment of the Sabka Biswas Yojana, introduced for resolution of old pending disputed matters related to service tax and central excise, was 30th June and this scheme cannot be availed from Wednesday.
The government has made it clear that it will not extend this scheme beyond 30 June 2020.
In this context, the Central Board of Indirect Taxes and Customs (CBIC) had given information, in a tweet, that 0.19 million declarations of Rs90,000 crore have been filed under this scheme. If this is not paid by 30 June 2020, they will not get benefits.
Under the Prime Minister Kisan Samman Nidhi Yojana, Rs6,000 is given to the farmers in three installments of Rs2,000 every year. So far five installments have been sent to the farmers. Registration for the scheme has now ended on 30th June.