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Crucial Financial Changes to kick in from 1 Jan 2022

As we edge closer to the end of 2021, there are a few notable changes that is set to kick in from 1^st Jan 2022. This includes changes in banking and financial industry. In this article, we have list down the significant financial changes that you should be aware.

List of Financial Changes effective from 2022

Safe card payments

To make transaction through debit/credit cards safe, the Reserve Bank has asked merchants to remove all card related data from their platforms. With this change, customers need to provide full card details or can opt for tokenisation. Tokenisation refers to replacement of the actual card details with an alternate code or token.

Strict GST Rules

The indirect tax regime, which witnessed a significant change with the advent of GST is set to be made more stringent. Various changes has been proposed in GST, some of them includes eligibility for tax credits, norms related to filing appeals in respect of some cases, filing returns and the consequence on its non-filing etc.

Increase in Cash withdrawal fee

ATM transactions are set to be costlier beyond the number of free limits. Once the free transactions have been exhausted, banks can charge 21 rupees per transaction. Banks currently charge 20 rupees per transaction from customers. 5 free ATM transactions are allowed from one’s own banks’ ATM, including cash withdrawal, balance enquiry, changing the ATM PIN, mini statement request and opening a fixed deposit in the same bank ATM.

High GST Rates

Apparel, footwear and fabrics are set to be more expensive from the beginning of the year 2022 due to a uniform 12% GST. The GST rate on apparel and footwear costing up to Rs. 1000 per piece is set to be hiked from 5% to 12%. Moreover, auto rides booked through aggregators such as OLA and Uber will attract 5% GST.

ITR Penalty halved

In case of ITR filing of FY 2020-21, the amount of penalty for late filing has been cut by half, which means earlier 10000 rupees was charged now it has been reduced to 5000. Please note that no penalty will be levied on those having income below the taxable limit, even if the ITR is filed after the deadline. However, there are certain exceptions to it.

India Post Payments Bank to now levy a charge on deposits

For cash deposits beyond a specified limit, there will be a fee attached. So, it means that cash deposits will not be free in 2022 in case of some of the banks. For Payments bank, RBI provides that they cannot have a sum more than 1 lakh rupees in their savings account.

Procedural change

Food aggregators such as Zomato and Swiggy would be required to collect and deposit GST with the government on restaurant services supplied through them. As per a report, unregistered restaurants on these apps caused a tax evasion of close to 2000 crore rupees.

Rules on bank lockers

RBI has issued new rules in respect of bank lockers which will be applicable from 1^st January. The Reserve Bank of India (RBI), in a notification issued on August 18, 2021, informed that the bank cannot disclaim liability in case of loss of locker contents due to theft or due to fraud by its employees. In such scenario, the bank will be required to pay 100 times the annual rent of the locker to the customer. However, if the locker is damaged due to natural calamities, then the bank will not be responsible for it.

Employees Provident Fund benefits only to the accountholders who appoint a nominee

The Employees’ Provident Fund Organisation (EPFO)^[1], through a notice, notified that in case where the account holders do not appoint a nominee, they wouldn’t be able to avail the benefits of the Employees’ Provident Fund (EPF). It will come into effect from the 1st of January 2022. The EPFO has also raised the maximum assurance benefit under the Employees Deposit Linked Insurance scheme up to Rs 7 lakh earlier.

Conclusion

In order to plan your finances well you should be aware of these financial changes that will be implemented from the beginning of 2022.

Read our article:Changes in GST rates effective from 1st January 2022