What changes did the share market make in terms of rules?

Stock Market Rule Changes: From October 1, 2024, several new tax and stock market rules are set to impact Indian investors and taxpayers. If you invest in the stock market or pay taxes, it’s important to be aware of these changes. Major updates to stock market regulations include various tax adjustments and fees that may affect your financial planning and investments.

STT charge doubled

One major change involves the Securities Transaction Tax (STT) on Futures & Options (F&O) trading. STT on futures will rise to 0.02%, while for options, it will increase to 0.1%, driving up the cost of trading, particularly affecting retail investors.

Aadhaar-PAN mandatory in ITR

Another critical change is the mandatory linking of PAN and Aadhaar for income tax filings. Previously, taxpayers could submit their enrollment ID in place of Aadhaar and PAN, but this option will no longer be available. The aim is to prevent the misuse and duplication of PAN numbers.

There will be tax on share buyback

Additionally, share buyback income will now be taxed as dividend income, significantly increasing the tax burden on shareholders. This change aligns buyback taxation with dividend income, meaning shareholders will face higher personal tax rates on such earnings.

Floating Rate Bond TDS

In terms of government bonds, the new regulations impose a 10% TDS on floating rate bonds issued by central and state governments. However, there’s a relief clause where no TDS will be deducted if the revenue from these bonds is less than ₹10,000 annually.

Reduction in TDS also

Lastly, certain TDS rates have been reduced from 5% to 2%, which includes sections like 194-IA and 194-M. Alongside these adjustments, the government is also launching the ‘Vivad se Vishwas Scheme 2.0’, which aims to settle tax and corporate disputes more easily, helping individuals and businesses avoid lengthy litigation.

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Rishita Diwan

Content Writer

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