Attention! Here's what's changing with your PPF, F&O trading, and buybacks, starting today!

• STT increased on futures and options trading
• Changes in TDS rates (from 5% to 2%) on payments for life insurance policy, brokerage
• Buybacks to be treated as dividends for taxation purposes
• Small savings account rates left unchanged for Oct-Dec 2024

Starting October 1st, a lot is set to change with your money. From F&O trading (futures and options) and buybacks getting more expensive in the hands of the individual, to changes in TDS slabs for payments concerning life insurance, brokerage, and more, here's a ready reckoner for all that you need to know:

1. STT upped for F&O (Futures and Options) trading
This budget, in a bid to discourage retail investors from burning their hands in the highly risky F&O segment, the government had proposed raising the STT (securities transaction tax) for both futures and options. Starting today, you will have to pay an STT of 0.1% on premium earned from option sales, as opposed to 0.0625% previously.
As for futures, the STT is set to rise to 0.02% of trade price, up from its previous mark of 0.0125%.

Notably, STT is levied every time an individual purchases or sells a security, which significantly increases its incidence and coverage. For instance, if the trading price of the futures you're selling today is Rs 1,000, you'd have to pay Rs 0.2 as STT today. Till September 30th, the STT applicable would be Rs 0.12. Similarly, for options, if the settlement price of your options contract is Rs 1,000, your STT payable today would be Re 1, which earlier stood at Rs 0.625

While this may sound super inconvenient for frequent or intraday traders, a recent SEBI study has highlighted that a staggering 93% individual traders have incurred just losses while trading in the F&O segment between FY22 and FY24, with the total losses exceeding Rs 1.8 lakh crore during this period. Only a tiny 1% traders managed to rake in profits above Rs 1,00,000. Perhaps SEBI is thinking along the lines of prevention being better than cure?

2. Changes in Debit card rules for ICICI bank
ICICI debit card users, who also happen to be frequent flyers, listen up! Starting today, you will be able to access the complimentary airport lounge service twice, but only if you have spent Rs 10,000 or more via your card in the previous quarter.

So, suppose you've spent just Rs 8,000 between July-September 2024 via your ICICI debit card. Since this falls below the Rs 10,000-threshold, you wont be able to access complimentary airport lounge service two times between October-December 2024.

3. Changes in rules for PPF, small savings account
The interest rates on various small savings schemes were left unchanged by the Finance Ministry for the upcoming quarter i.e. October-December 2024. For this quarter, Public Provident Funds (PPF) will earn you 7.1% interest p.a., while Sukanya Samriddhi Yojana (SSY) and Senior Citizens Savings Scheme (SCSS) will offer interest at the rate of 8.2% p.a.


Also, these changes in PPF accounts will kick in from today:

• Have a PPF account in your child's name i.e. a minor? This account would earn the same interest as a POSA (Post Office Savings Account) i.e. at 4% p.a. currently. Once your child turns 18, the prevailing PPF interest rate, which is presently at 7.1%, will be levied.
• No more interest earning via multiple PPF accounts! Starting today, only your primary PPF account will be eligible for interest.
• Are you an NRI who currently holds an active PPF account, and you have not disclosed your residency status in Form H (used to extend the tenure of your PPF account by blocks of 5 years)? Starting today, such accounts will earn zero interest.

4. Buyback set to get more expensive
Buybacks happen when a company decides to buy back its own shares from its existing shareholders. What's in for the shareholders, you ask? The buyback price is usually higher than what is offered by the markets. You are eligible to participate in a company's buyback if you hold its shares on or before the record date that's set by the company.

Starting today, buybacks will be treated just like dividends. This means starting today, the burden of tax payable on buybacks will fall on the shareholders selling the shares, and not the company. Buybacks will be taxed as per the individual's personal income tax bracket.

5. Revision of TDS rates
Starting today, the TDS (tax deducted at source) on various payments you make for life insurance, lottery tickets and more is also set to change. Here's how TDS rates will look, starting today: