These Financial Rules Will Change from August 1 and Increase Your Expenses

From August 1, several financial rules will changes(undergo significant), potentially impacting your monthly expenses. Whether you're a taxpayer, a borrower, or an investor, these updates are crucial to understand. Here's a detailed look at the changes and how they might affect your finances.

1. Revised GST Rates on Various Goods and Services

The Goods and Services Tax (GST) Council has announced revisions in GST rates on several goods and services, effective from August 1. Items such as pre-packaged and labelled food items, including cereals, pulses, and flour, will now attract GST. Additionally, services like hospital rooms with tariffs above ₹5,000 per day will also be taxed.

Impact on Consumers

These changes mean that your grocery bills might increase, as essential food items that were previously exempt from GST will now cost more. Similarly, hospital stays could become more expensive, potentially raising your overall medical expenses.

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2. New Rules for Cryptocurrency Transactions

Cryptocurrency transactions will also see new regulatory measures from August 1. The government has introduced a 1% Tax Deducted at Source (TDS) on payments made for the transfer of virtual digital assets. This is in addition to the existing 30% tax on profits from cryptocurrency investments.

Impact on Investors

For cryptocurrency investors, this means increased costs and stricter compliance requirements. Every transaction will attract a 1% TDS, which could affect liquidity and trading volumes in the market. Moreover, the overall tax burden on cryptocurrency gains will rise, making it essential for investors to factor in these costs.

3. Changes in Credit Card Rules

Credit cardholders should be prepared for new guidelines issued by the Reserve Bank of India (RBI). Starting August 1, banks must seek explicit consent from customers before increasing their credit limits. Additionally, there will be more stringent norms for closing credit card accounts.

Impact on Cardholders

These changes aim to enhance customer protection and transparency. While the need for explicit consent will prevent unsolicited credit limit hikes, the stricter rules for account closures might make it harder for customers to cancel cards. Cardholders need to stay vigilant and review their credit card statements regularly to avoid any unexpected charges.

4. Hike in Health Insurance Premiums

Health insurance premiums are set to rise from August 1. Insurers have attributed this increase to rising medical costs and the inclusion of new diseases and treatments under policy coverage. The Insurance Regulatory and Development Authority of India (IRDAI) has approved these hikes.

Impact on Policyholders

Policyholders will need to shell out more for their health insurance policies. While the enhanced coverage is a positive development, the higher premiums could strain budgets, especially for families and senior citizens relying on fixed incomes.

5. Amendments in EPF Withdrawal Rules

The Employees' Provident Fund Organisation (EPFO) has introduced amendments to the withdrawal rules from August 1. Members who have not seeded their Aadhaar with their EPF accounts will face restrictions on withdrawals.

Impact on Employees

Employees need to ensure their Aadhaar details are updated with their EPF accounts to avoid any inconvenience. Non-compliance could lead to delays in accessing funds, particularly in emergencies. This move is part of the government's efforts to streamline processes and reduce fraud.

6. Changes in Income Tax Filing Deadlines

The deadline for filing Income Tax Returns (ITR) for the financial year 2022-23 has been extended to August 31. This extension provides taxpayers with additional time to compile their documents and file returns without facing penalties.

Impact on Taxpayers

Taxpayers get a breather with the extended deadline, allowing them more time to ensure accuracy in their filings. However, it's crucial to avoid last-minute rushes and file returns promptly to avoid any last-minute glitches or issues with the tax portal.

Conclusion

These changes, effective from August 1, reflect the government's ongoing efforts to streamline tax administration, enhance regulatory oversight, and protect consumers. While these measures aim to improve the overall financial landscape, they also bring increased expenses and compliance requirements for individuals and businesses alike. Staying informed and prepared is essential to manage these changes effectively and mitigate their impact on your finances.