The coronavirus or Covid-19 pandemic has affected the livelihood of people all over the country. Many have lost their jobs while others have to make do with 50% salaries. Some, even though are not laid off, have their salaries delayed by 2 or even 3 months. All of these have created a sense of panic and helplessness in daily-bread earners all over the country.
Earlier this year, the Government of India announced several measures to diminish the problems of the common man. These included ATM charge waiver, savings account non-maintenance charges fee waiver, and more.
However, from 1st July 2020, some of these relaxations shall be withdrawn. Here are the 5 money-related items which have come into effect from 1st July, 2020.
1) Restrictions on ATM use is back again
On March 24 this year, the government announced that for 3 months all debit card holders can make withdrawals from any ATMs without any withdrawal limit. From the 1st July, the regular charges and limits shall apply. Here are the numbers of free transactions a debit card holder can still make, according to the RBI.
Transactions at bank’s own ATM from anywhere: A debit card holder now has a minimum of 5 free financial transactions in any month. This will not depend on the location of the ATM. Furthermore, there shall be an unlimited number of non-cash withdrawals for free.
Transactions from ATMS in metro cities: If the ATMs are located in any of the 6 Metro cities namely Chennai, Bangalore, Kolkata, Hyderabad, Delhi and Mumbai, savings bank accounts customers get a minimum of 3 free transactions per month.
Transactions from other bank’s ATMS at non-metro areas: From any other location other than the 6 metro cities mentioned above, banks will give savings account holders a minimum of 5 free transactions per month at other bank’s ATMs.
Charges when exceeding transactions limit: According to RBI guidelines, these can’t charges cannot be more than Rs.20 at maximum, per transaction. Applicable taxes are extra.
2) Penalty charges for non-maintenance of bank account balance
A big relief measure provided by the Finance Minister Nirmala Sitharaman in March was the waiver of penalty on non-maintenance of one’s bank account balance. The waiver was for 3 months. This period is part now, and thus non-maintenance of bank account balance shall attract a penalty from now on. The penalty amount will differ from bank to bank.
3) Stamp duty on buying of mutual fund units and shares
From 1st July 2020, buying of mutual fund units and shares shall attract stamp duty. According to the FAQ published by the Finance Ministry, the previous system of giving stamp duties on securities caused multiple rates for the same financial instrument, which thus resulted in multiple incidences of duty and jurisdictional disputes. This in turn raised transactional costs in the security market and adversely affects capital formation. By the current amendment, the stamp duty shall be levied by one agency. Furthermore, the revised FAQ has clarified that there will be no stamp duty for redeeming mutual funds since it is neither a sale not a transaction. The duty is charged on the unit value, and does not include charges like GST, AMC fee, etc.
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