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Year ender 2023: 10 important regulatory changes that took place in India

2023 was a busy year for regulators like the Reserve Bank of India and the Securities and Exchange Board of India. Here are the 10 key changes on the regulatory front

year ender 2023, key regulatory changes

Illustration: Binay Sinha

Raghav Aggarwal New Delhi
2023 is about to come to an end. It marked a busy year on the regulatory front in India. From the discontinuation of Rs 2,000 banknotes to tax on the online gaming industry, the country witnessed several changes by regulators.

Here are the 10 most important changes that happened in 2023:

Tax on online gaming

In August, the Goods and Services Tax (GST) Council announced its decision to impose a 28 per cent tax on the value of bets in online gaming effective from October 1. The tax was implemented on the total money players deposited to play a real money game. It faced backlash from investors and gaming companies.
 

However, the Centre stuck to its decision, and it issued notices to gaming companies to deposit their pending taxes from October. The total claims exceeded Rs 1 trillion. Later, the Supreme Court also declined to grant a stay order on the show-cause notices issued by the Centre. 

Withdrawal of Rs 2,000 notes from circulation

In 2023, the Reserve Bank of India (RBI), under its clean note policy, announced the withdrawal of Rs 2,000 bank notes from circulation. It advised the citizens to deposit and/or exchange these banknotes on or before September 30, 2023. The last date was later extended to October 7, 2023.

Now, the notes can be exchanged at RBI branches. As of November, 97.26 per cent of Rs 2,000 notes were returned to the banks via deposits or exchange.

New TCS rates under LRS

From October 1, the remittances under the Liberalised Remittance Scheme (LRS) now attract a tax collection at source (TCS) of 20 per cent if they exceed Rs 7 lakh per annum. The exceptions under the rule change were expenses towards medical and educational purposes.

The rule change also applied to international credit card transactions exceeding Rs 7 lakh. 

Repo rate pause by RBI

After hiking the benchmark repo rate by 250 basis points, the RBI's Monetary Policy Committee (MPC) decided to push the pause button in April. Since then, the repo rate has been kept unchanged at 6.5 per cent. This also pushed interest rates on fixed deposits and loans higher.

Economists suggest that the rate cuts may start in 2024.

UPI limit hikes for hospitals, schools

In the December RBI MPC announcement, governor Shaktikanta Das announced that the central bank has raised the Unified Payments Interface (UPI) payment limits for hospitals and educational institutions from Rs 1 lakh to Rs 5 lakh per transaction.

"The enhanced limit will help consumers make UPI payments of higher amounts for education and healthcare purposes," Das said during the bi-monthly policy announcement.

Rolling out T+1 settlement cycle

In 2023, Securities and Exchange Board of India (Sebi) chairperson Madhabi Puri Buch announced that from October, India would move to a T+1 settlement cycle for all scrips. A stock market settlement cycle refers to the period within which securities and funds are delivered and settled after a trade is executed between a buyer and a seller.

This process involves the transfer of ownership and funds, finalising the transaction, and completing the trade.

Changes to REIT regulations

Effective August 17, Sebi introduced several amendments to the regulatory regime around Real Estate Investment Trusts (REITs). The changes included the introduction of nomination rights at the board of the Manager of REITs for unit-holders of REITs.

It also said that any unit-holder of REITs, holding not less than 10 per cent of the total outstanding units, should comply with a Stewardship Code.

Changes to perpetual SIP

In a circular on August 18, the National Automated Clearing House (NACH) introduced a time limit for mutual fund contributions, giving a blow to the perpetual systematic investment plans (SIPs).

The investors now need to specify a period for their mutual fund investments. The longest permissible duration has been fixed at 30 years. Notably, perpetual SIPs did not have a fixed investment period.

More savings for senior citizens

In 2023, the maximum deposit limit for senior citizen savings schemes was increased to Rs 30 lakh from Rs 15 lakh earlier. Additionally, the maximum deposit limit for the monthly income scheme was increased to Rs 9 lakh from Rs 4.5 lakh for single accounts. For joint accounts, the limit was raised to Rs 15 lakh from Rs 7.5 lakh earlier.

New SEZ rules

In December, the Ministry of Commerce announced changes to the regulations governing Special Economic Zones (SEZs). The amendments permit the demarcation of parts of an SEZ area into a non-SEZ area after repayment of tax benefits availed of to date.

Before the amendment, SEZ operators could de-notify only the land parcel from the SEZ to the non-SEZ. It required the entire built-up area over the said land parcel to be vacated before applying for de-notification.

As a result, SEZ spaces saw a gradual exit of tenants, leading to a decline in occupancy.

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First Published: Dec 29 2023 | 4:41 PM IST

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