HOME BUYING
In a major relief to middle-class homebuyers planning to buy their first house, the government has decided to increase the carpet area limit of homes eligible for Credit Linked Subsidy Scheme under the Pradhan Mantri Awas Yojana. For a middle income family falling under MIG-I with annual income above `6 lakh and up to `12 lakh, the carpet area cap has been increased from 120 sq. m to 160 sq. m. For families with income above `12 lakh and up to `18 lakh, the carpet area cap has been increased from 150 sq. m to 200 sq. m. For MIG-I, the interest subsidy is 4 per cent, eligible housing loan amount is `9 lakh and total subsidy is `2.35 lakh. For MIG-II, the interest subsidy is 3 per cent, eligible loan amount is `12 lakh and total subsidy is `2.30 lakh. TAXATION
Deadline For Aadhaar-PAN Linking Extended; e-PAN Can Be Generated Instantly
The Central Board of Direct Taxes has extended the deadline for individual taxpayers to link their PAN with Aadhaar till March 31, 2019, through a notification issued on June 30, 2018. This has come in the backdrop of an ongoing court proceeding in the Supreme Court where the apex court had directed extension of the March 31, 2018, deadline for linking Aadhaar to various services. Meanwhile, the income tax department has launched a facility for instant generation of new PAN called e-PAN. The e-PAN will be generated digitally through Aadhaar-based e-KYC in which OTP will be sent on the mobile number registered in the Aadhaar database. An e-PAN PDF can be downloaded after successful allotment. This facility is only for resident individuals. BANKING
After RBI Repo Rate Hike, Loan Rates Go Up
Home loan borrowers will need to pay more on home loans as the RBI increased the repo rate by 25 basis points from 6 per cent to 6.25 per cent in its June 6 second bimonthly meeting of 2018/19. Anticipating this, many big lenders such as HDFC Bank, ICICI Bank and SBI had already increased their lending rates, while many more, such as PNB, Bank of India, Oriental Bank of Commerce, Syndicate Bank and Karur Vysya Bank, did so after the RBI action. The increases have largely been in the range of 5 to 10 basis points. Rupee
68.9389
The lowest value of the Indian rupee against the US dollar at the end of day on June 28, 2018, as per the RBI data. The earlier lowest closing was 68.7775, on February 26, 2016. The US dollar has strengthened against most emerging market currencies. Rising interest rates in the US have made domestic returns there attractive to Foreign Portfolio Investors, which are now pulling out money from India, impacting the rupee. Firm oil prices even after the news of the likely increase in production by OPEC has added to the rupees weakness as this will mean a higher import bill and current account deficit.
TAXATION
Taxpayers Get More Flexibility
Now, one will be able to change the self-occupied property mentioned in ITR during the detailed tax assessment phase. This has become possible after a recent ruling by Mumbai bench of Income Tax Appellate Tribunal in which a taxpayer was allowed to modify his earlier selection of self-occupied property. In case of multiple properties, only one property is allowed to be selected as self-occupied, while the rest are considered as deemed to be let out even if you have not actually let out the property (one has to pay tax on notional rental income from such a property).
Pension
Proposal To Raise APY Pension To Rs10,000
The government has received a proposal from the Pension Fund Regulatory Development Authority (PFRDA) to increase the maximum monthly pension under the Atal Pension Yojana (APY) from Rs5,000 to Rs10,000. Keeping in mind the long period involved and inflation, Rs5,000 monthly income after a period of 20-30 years was perceived to be insufficient.
The APY was recently in news for crossing 10 million subscribers. The scheme has gained momentum of late with five million people getting onboarded in FY2017/18 alone. Increase in the monthly pension amount will make the scheme even more attractive to people and may help increase the subscriber base significantly. The PFRDA has also proposed that the maximum age to enter the scheme be raised from 40 years to 50 years so that more and more people can subscribe to this scheme.