From IPOs to PF, here's a list of changes that come into effect on Friday

Come April 1, 2022, a lot could change in areas, such as the stock market, IPOs, cryptocurrencies, personal finance, and real estate. Here is the list of a few such changes that shall come into effect on Friday:

Greater scrutiny of RPTs

New provisions around related-party transactions (RPTs) come into force on April 1, 2022 (a few amendments will be effective from April 1, 2023). The market regulator, Sebi, has tightened norms around materiality thresholds, transactions with subsidiary companies, and approval for transactions between two foreign subsidiaries. Currently, listed entities need shareholders’ approval for material transactions entered with related parties, if such a transaction exceeds 10 per cent of the consolidated annual turnover of the listed entity. From April 1, this threshold will be Rs 1,000 crore or 10 per cent, whichever is lower. The move has made large corporates unhappy as it increases their compliance burden and requires them to frequently obtain shareholders’ nod.

New IPO rules

Initial public offerings (IPO) launched after April 1 shall provide a sub-quota within the high net-worth individual (HNI) quota for those investing between Rs 2 lakh and Rs 10 lakh. Further, the lock-in period for 50 per cent of shares allotted under the anchor category will be 90 days, up from 30 days. Also, issue proceeds raised for general corporate purposes cannot exceed 35 per cent and there will be a cap on how much holdings promoters can divest through IPOs. The new rules will alter the IPO landscape.

CMD separation

The rules around the mandatory separation of chairman and managing director (MD) posts were to come into effect on April 1. But following opposition from India Inc, Sebi made the rule voluntary and notified the same. Earlier also companies could voluntarily separate the two posts, but the notified regulations define ‘relatives’ as ideally the chairperson should be a non-executive director and not related to the MD. Experts say companies complying with the voluntary norms will improve their governance score.

Crypto tax

In the FY23 Budget, Finance Minister Nirmala Sitharaman imposed a 30 per cent income tax on virtual digital assets, including cryptocurrencies and non-fungible tokens (NFTs). This will come into force starting April 1. The finance ministry has clarified that one cannot set off losses in one cryptocurrency against gains in another cryptocurrency, which has riled the crypto participants. The 1 percent tax deducted at source on crypto-transactions will come into force from July 1.

E-filing for exporters

The DGFT will operationalise a new online module for filing electronic registration by exporters for the Interest Equalisation Scheme from April 1 to capture granular data about the beneficiaries of the scheme and its effective monitoring.

PAN-Aadhaar seeding

CBDT has given a one-year window after March 31, 2022. PAN will not be de-activated till after March 31, 2023, even when it's not linked to Aadhaar. However, a penalty will have to be paid after March 31, 2022, to get PAN linked with Aadhaar. After March 31, 2023, PAN will be deactivated if not linked with Aadhaar. 

I-T return filing 

Earlier, one only had a window of five months from the due date of filing returns to revise the tax returns. Now, taxpayers can file an updated return for errors or mistakes done in income tax returns. Taxpayers can now file an updated return within two years from the end of the relevant assessment year. The option is available to report additional loss or fall in tax liability.

NPS deductions for state government staffers

 State government employees will now be able to claim deduction under Section 80CCD(2) for NPS contribution by the employer up to 14 per cent of their basic salary and dearness allowance. Experts believe this move will ease the tax burden on employees. M Brave, MB Wealth Financial Solutions says: "The parity introduced on the NPS tax deduction from 10 per cent to 14 per cent for both state and central government employees is a positive move that will encourage retirement planning and savings."

Shell out more on property tax, stamp duty

The Maharashtra government is likely to the property tax rate for all properties over 500 sqft to the tune of 15-18 per cent. Anuj Puri, chairman, ANAROCK group, says: “At the same time, it is also anticipated that it may increase the ready reckoner rates —which, in a way, can be a double whammy for property taxpayers via an increase in both property tax and ready reckoner rates.” The move may be envisaged as a means to recover the losses to the exchequer due to the waiver of property tax for all properties below 500 sqft, proposed earlier. 

Meanwhile, the Maharashtra government is expected to increase the stamp duty on house registration by 1 per cent from April 2022. The government is all set to increase it by 1 per cent to an effective rate of 6 per cent of the agreement value, from the current 5 per cent. With the introduction of a metro cess, the stamp duty in Mumbai will go up to 6 per cent. Likewise, in Pune and Nagpur, the introduction of metro cess will take the stamp duty to 7 per cent, from 6 per cent now. Samantak Das, chief economist and head of research & REIS, India, JLL says: “The metro cess from April 1, 2022, in Mumbai and Pune is likely to have a detrimental impact on the residential market recovery currently underway.”