How GST will Impact your Personal Finances

The goods and services tax (GST) is slated to come into effect from 1st of July, 2017 and has already created a blend in the consumer overall economy and business sectors as well. However, the brand new initiative is expected to {increase the} entire tax collection procedure and give a major boost to the Indian economy. In compliance with the latest GST news, your financial planners in Delhi NCR will also be impacted by the same. Here's how:

Mutual Funds- GST will lead to a small increase in the cost percentage which is charged by mutual funds for finance management purposes. According to experts, managing any finance will be taken as something rendered and hence will experience 15% in service tax and 18% in future once GST comes in.

Banking- Most transactions encompassing credit cards payments, processing of lending options in India, cash withdrawals, and fund transfers and so on will be a little more expensive with 18% tax impact. However, in the future, this increase in taxes collections may be equalised through input credit which banks can claim under the GST regime. Solutions like savings accounts and fixed deposits will stay unchanged. Lowering the quantity of transactions is the best way to become softer the blow from GST when it comes to customers.

Insurance- With taxes rates increasing to 18%, the costs associated with purchasing insurance and maintaining your policy will also go up slightly. Tax will be 18% in the first year for specific term policies and also on the premium for renewal. For every Rs. 100 that you pay towards your premium, you have to shell away Rs. 18 as GST as well. Traditional insurance plans which now have service tax of 3. 7%% on the high quality will have tax of 4.5% in the first year under GST. Home, auto, health and other general insurance will see a rise of 3% in premiums from the current premiums effective from the 1st of July, 2017.

Shares- Stamp duty and STT (security transaction tax) will be free from GST but service tax will go up to 18% which will have a small impact on transactional costs in case there are retail stock market shareholders.

Gold- Gold will be costlier and there is a proposal for 3% taxes on gold jewellery and gold. Input taxes credit may also be claimed in case of gold jewellery manufacturing and this can be modified with the taxes as far as jewelers are involved. In case customers sell their gold back to their jewellers, they will be unable to get the expense borne while purchasing the same.