A new financial year begins with new financial changes. The rules applicable till last year may or may not remain valid this year. There are a lot of services for which you need to pay more money not only that there are some penalties that will be applicable from the new financial year. The details of financial changes and its impact on your pocket are listed below.
10 New Financial Changes and its impact on your pocket
More cost for Health Insurance and Vehicle Insurance
The first financial change that will cost you more money is related to general insurance. Insurance Regulatory and Development Authority of India (IRDAI) has approved premium hike for the general insurance. Accordingly, health insurance and vehicle insurance shall cost you more from April 2017 onwards. The rate by which premium will go up will depends upon types of vehicle and capacity. A maximum rate of the premium hike will be 40%. The detail of premium rise in vehicle insurance is given below.
Cash Transaction and other charges
From April,1st ,2017 onwards SBI customer have to pay more money for the cash transactions. Only 3 cash deposit transaction per month would be free per month. There will be transaction charges Rs.50 + service tax beyond this limit. Private sector bank such as Axis, HDFC, and ICICI Bank have already introduced new cash truncation charges from March 2017.
Also Read – 5 New Tax Changes and Impacts
In addition to above, SBI account holders have to maintain minimum balance in saving bank account ranging from Rs.1000 to Rs.5000 depending on geographical location. Non-maintenance of required balance will lead to penalty of Rs.100 + service tax.
Penalty for Cash payment above 2 Lakh
The government has introduced a penalty for cash payment above 2 Lakh. You would be penalized with 100% penalty if you found violating this rule. This rule is not applicable for self-withdrawal cash via cheque from the bank.
More Income Tax
If you are super rich with annual income above 50 Lakh but less than 1 Cr you need to pay additional surcharge @10% on taxable income. Earlier there was no additional surcharge applicable for the superrich taxpayers.
Cash Payment limit reduced to Rs.10000
In order to reduce cash transaction existing threshold limit of cash payment to a person from Rs.20000 is reduced to Rs.10000 in a single day. Any payment or expense above Rs.10000 cannot claimed as income tax exemption. Transport expense is allowed up to Rs.35000.
Donation Above Rs.2000 in cash not exempted in Income tax
Any donation made above Rs.2000 in cash shall not be accepted as Tax exemption. Donation amount given by cheque shall be accepted for tax exemption.
Delay penalty for return filing increased to Rs.10000
If you are unable to file income tax return within stipulated limit as specified by the government, you need to pay delay penalty of Rs.10000.
Also Read – 20 PAN Card Changes you must be aware about
Saving Scheme Interest rate reduced
The small saving scheme interest rate is reduced by 0.10%. The new rate shall be applicable for first quarter. i.e from April,2017 to June,2017. Accordingly, PPF interest rate shall be 7.9% and interest rate for Sukanya Samriddhi Scheme will be 8.4%.
Aadhar Number is Compulsory for Income Tax Return
The new financial change introduced by the government is Aaddhar Number is now compulsory for Income tax return filing. You cannot file income tax return if you don’t have Aadhaar Number.
Salary above Rs.10000 and above to be done via Cheque
Now onwards it is mandatory to pay employee salary, bonus or wage above Rs.10000 via cheque. No cash payment is permissible.
I am sure knowledge about new financial changes will help you in dealing with financial matter in the coming year.
Do share your views and queries in the comment section.