New income tax rules come into effect from today: Here is everything that's changed

New income tax rules: As the Lok Sabha elections were held this year, the government was forced to present two budgets - an interim and the full union budget - the latter tabled in July. As a result, a number of changes proposed by the ruling Modi government will come into effect from September 1, 2019 i.e. today. These include TDS on all cash withdrawals exceeding Rs 1 crore in aggregate in a year from finance institutions, higher TDS if life insurance maturity proceeds received are taxable in your hands, and more. So, here is a quick look at everything that will change for income taxpayers from today. 

The government has changed the Section 194-IA of Income Tax Act after which all charges like club membership fee, car parking fee, electricity or water facility fee, maintenance fee, advance fee or any other charge of similar nature, incidental to transfer of the immovable property, under immovable property, will be eligible for TDS. As of now, 1 per cent TDS is levied if the value of the property exceeds Rs 50 lakh. From now on, charges like club membership fee, car parking fee, electricity or water facility fee will also be included for calculation of TDS.

The government has also introduced Section 194N which would impose 2 per cent TDS on all cash withdrawals exceeding Rs 1 crore in aggregate in a year from banks, post offices or co-operative society engaged in carrying on the business of banking. The withdrawals made before September 1 will not attract these rates. 

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As mentioned above, life insurance would attract a higher TDS of 5 per cent, if maturity proceeds received that are taxable in your hands. Before the implementation of this, if the annual premium paid on the insurance policy was less than 10% of the sum assured, the amount received on maturity was exempt from tax.

In this year's Budget, the government also proposed to allow interchangeability between Permanent Account Number (PAN) and Aadhaar. This means those who do not have a PAN card, can quote their Aadhaar card to complete transactions. 

Lastly, a new Section 194M has also been introduced under which an individual is required to deduct TDS at 5 per cent for paying a sum in excess of Rs 50 lakh for carrying out any work in pursuance of a contract or by way of fees for professional services during a financial year. Payments made on or after September 1 will attract the provisions of Section 194M.