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.
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    COMMENTS

    mahesh.bhatt

    4 hours ago

    Pass the messy costs created by Bank Managers & Advisors & Samanj sevaks to Samaj Easy Management Policy Take it easy sab chalta hai Wholesale Volumes businesses pe Retail's commission n margins Profiteering policies ? Like Poor Reliance Retail & Futre group defaulting wholesalers will serve Aam Aadmi as Kirana Mom Pop shops loot aam aadmi? In short short shocks aam aadmi? Mahesh Bhatt

    ajadhav42

    3 days ago

    Each & every Bank & financial Institutions should have notice paper on their doors to inform & act on the excessive or regular charges imposed by Banks in line with Ministry of Finance. They should not hastle any customers for these charges.

    kvrao42004

    4 days ago

    When there are many changes under the laundry list, it will go unnoticed. You will know only through your account where the shoe pinches.

    BR

    4 days ago

    Like it is not possible to find out what strain of Corona virus is in each place, it is not easy to know if Tapeworm or Extra Terrrestrial is in FinMin.

    tillan2k

    4 days ago

    Govt financial virus is worse than coRONA virus

    Ramesh Popat

    4 days ago

    looting accelerates!

    BR

    4 days ago

    Ever since a Tapeworm or Extra Terrrestrial entered Finance Ministry as it has eaten & will still eat all our heads.

    suketu

    4 days ago

    Modi govt killing the mutual fund industry which is already half dead.Now people wl avoid Mfunds even more and put money in blue chips.

    groupstonath

    4 days ago

    Many a time when we try to get cash from ATM we find that there is no cash. These banks which charge such exorbitant charges must be asked to pay say Rs. 250/- when they are unable to fulfill their duty which is to provide cash. This amount is to be credited to the account holders account.

    REPLY

    bpugazhendhi

    In Reply to groupstonath 4 days ago

    Yes! In such situations we are forced to access other bank ATMs which will attract fee from our account. It is double punishment for the account holders. Banks should be made to pay for denial of cash at ATMs. Charges cannot be one way!

    groupstonath

    In Reply to bpugazhendhi 3 days ago

    I have a doubt. Do these banks treat our attempt to get cash when there is no cash in the ATM as one out of 5 attempts allowed over and above which they have said they will charge extra? That would be like rubbing salt on a wound!

    yerramr

    4 days ago

    Financial inclusion will be moving to financial exclusion window. The reach of services will be not only costly but will also be distant.

    rs235m

    5 days ago

    Banks should pay fixed deposit interest on minimum balance amount or should not insist on mon bal. There should not be one sided rule.Instead of paying penalty ,close the account.

    Uniform Stamp Duty on Securities Market Instruments from 1st July
    The amendments in the Indian Stamp Act, 1899, to bring about uniformity of the stamp duty on securities across states will come into effect from Wednesday 1st July.
     
    The Centre has created the legal and institutional mechanism to enable states to collect stamp duty on securities market instruments at one place by one agency, through the stock exchange or clearing corporation authorised by it or by the depository on one instrument, an official statement said.
     
    The amendment was brought for ease of doing business and bringing in uniformity of the stamp duty on securities across states thereby building a pan-India securities market, it said.
     
    The amendments to the Stamp Act, 1899, introduced in the Finance Bill, 2019, introducing the centralised system of stamp duty with a unified rate for all financial securities transactions were to become effective from 9th January first but it was later shifted to 1st April. On 30th March, the government decided shift its implementation to 1st July due to Covid-19 related lockdown across the country.
     
    As per the amendments and the new notification, stock exchanges will now collect stamp duty for trading in securities at a unified rate from July 1 and deposit the proceeds with the Centre, which will then divide it among states where the trade took place.
     
    At present, market participants collect stamp duty at rates fixed by the state where the trade takes place and deposit it with the local government. This created a complex system with multiple tax rates and differing regulations in different states, posing a challenge to settle deals.
     
    Under the amended provisions while stock exchanges or clearing agencies would collect duty on securities transactions (sale and purchase of shares) and deposit it with the centre, for transactions that don't happen on the stock exchange (off market transactions) platform, the depositories would collect stamp duties.
     
    Under the unified stamp duty system the rate of duty has been proposed at 0.0001 per cent for transfer and reissue of debentures while rates varies from 0.0005 per cent to 0.015 per cent for other financial securities transactions rated to shares, or derivative products.
     
    "The relevant provisions of the Finance Act, 2019 amending the Indian Stamp Act, 1899 and the Indian Stamp (Collection of Stamp Duty through Stock Exchanges, Clearing Corporations and Depositories) Rules, 2019 were notified simultaneously on 10th December, 2019 and these were to come into force from 9 January 2020, which was later extended to 1 April 2020 vide notifications dated 8 January 2020," a finance ministry statement said.
     
    Considering the stakeholder requests, the nation-wide lock-down and in line with the relaxations given on other statutory and regulatory compliance, the date for implementation was further extended to 1st July. it added.
     
    As per the government, this rationalised and harmonised system through centralised collection mechanism is expected to ensure minimise cost of collection and enhance revenue productivity.
     
    Further, this system will help develop equity markets and equity culture across the length and breadth of the country, ushering in balanced regional development, the statement added.
     
    Sector experts, however, say that with the implementation of the amendment, investments in new fund offers (NFOs) or primary issues either through direct investments or investments through indirect routes like mutual funds (MFs) would become expensive.
     
    After the implementation, stock exchanges or authorised clearing corporations and the depositories will be the collecting agents.
     
    For all exchange based secondary market transactions in securities, stock exchanges shall collect the stamp duty, and for off-market transactions, which are made for a consideration as disclosed by trading parties, and initial issue of securities happening in demat form, depositories shall collect the stamp duty.
     
    The regulators, RBI and SEBI have been authorised by the Centre under the Indian Stamp Act, to issue clarificatory circulars and operational guidelines on specific issues to ensure smooth implementation from 1st July.
     
    Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.
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    NSE Pulls Plug from its NOW Trading Software; 63 Moons' Offers Its Odin at 50% Discount
    After the National Stock Exchange (NSE) reportedly decided to pull the plug from its trading software Neat on Web (NOW), 63 Moons Technologies Ltd has offered its software Odin to brokers at 50% discount.
     
    In a release, 63 moons says, "Odin, which holds about 70% of the retail broking market share in trading software, has decided to provide a discount of 50% on its pricing and technological support to enable smooth transition of trading terminals from NSE’s NOW and to ensure business continuity in this hour of crisis."
     
    According to a report from The Hindu BusinessLine, nearly 12 years after it started offering stock brokers free connectivity to its trading platform, NSE has decided to discontinue its proprietary software NOW. 
     
    Quoting sources, the report says, on Monday NSE had called up several brokers to say that it will shut NOW in 90 days. NSE told the newspaper that exchanges world over publish only APIs for developing customised software that suit each broker’s need. "NSE too is giving APIs to build appropriate solutions for brokers. We believe time has come for the exchange to step back from front-end software,” the report says.
     
    Commenting on the development, Keshav Samant, chief executive (CEO) for brokerage technology solutions at 63 moons' says, “We are committed to serve the financial markets by making Odin as a more user-friendly product remains unwavering. We are continuously working at making Odin a more innovative platform with cutting-edge solutions."
     
    NSE has more than 800 trading members, of which at least a third survived only on NOW. The software has suffered some technical issues in the past. Two years ago, NSE NOW was shut for brokers and sub-brokers for some time. NSE was hit by a technical glitch in NOW during 2017 as well, when trading was halted for three hours.
     
    NSE NOW, the licensed trading software offered direct connectivity to the NSE for trade execution and data feeds through trading terminals, Web-based browsers and mobile devices.
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