Watch out! These Income Tax & Bank Charges will Apply from July 1

In wake of COVID19 pandemic, the GOI had announced several relaxations for taxpayers for FY 2019-20 and FY20-21. A lot of deadline extensions were also effectuated to offer liquidity ease to the individuals and businesses.

Some of these deadlines and waivers are expiring on June 30. So let’s make a quick note of these important deadlines and applicable charges. After all, a penny saved is a penny earned during this crisis. Let’s take a quick run through some of the important changes in Income Tax & bank charges that will apply from July 1.

1. Deadline for partial withdrawal from EPF account expires on July 1.

Just a few months ago, the government had offered a relaxation to partially withdraw some amount from one’s Employees Provident Fund and meet the cash disruptions caused due to Covid-19 crisis. From July 1 the deadline for withdrawal from PF account expires and you can no longer pull out cash from this retirement fund.

As a rule of thumb, you should not touch your retirement kitty as long as possible. Look for other sources of raising cash such as Home Loan Overdraft, Loan Against User Car, Gold Loan, pausing SIPs or liquidating FDs.

Read Blog: How to Get Cash during Lockdown without Stepping Out?

2. Chares to apply on ATM cash withdrawals

Another noteworthy change from July 1 is resumption of ATM withdrawal charges. Owing to Covid crisis government had waived off these charges till June 30.

However, during current times when it is highly recommended to observe social distancing ATM use should be discouraged. You should resort to online transactions using UPI, debit card or credit card. You can conveniently transact online from your smartphone. Besides, often online transactions translate into rewards and cashback.

3. Interest on advance tax will apply

As yet another cash relief to taxpayers, the GOI had said that payment of advance tax between June 15 to June 30, will be charged by 0.75 %, instead of 1 per cent. The FM had thus allowed payment of first instalment of advance tax till June 30, from June 15. Now anyone who pay the advance tax after June 30 is liable to pay due interest at 1 % on the taxes.

4. Application of stamp duty

The rules regarding Stamp duty have always varied state-wise. Primarily it was levied on property transactions. The government of India has now made stamp duty uniform across the country. Thus some rules also stand to change from July 1.

On June 30, Ministry of Finance said the GOI has created uniform, legal and institutional mechanism to enable all states to collect stamp duty on securities market instruments at one place by one agency i.e. through Stock Exchange or Clearing Corporation.

Thus stamp duty will be imposed on all transaction related to mutual funds. The rule will apply across states pan India.

5. Penalty on non maintenance of MAB (Minimum Account Balance)

Due to COVID Crisis, the government had offered various liquidity reliefs to individuals and businesses. The FM had announced suspension of penalty on non-maintenance of Minimum Account Balance in the Savings Accounts till June 30.

Thus from July 1, you must maintain the MAB, or else the bank will levy the applicable charges.

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