Mutual Fund Nomination and Post Office Scheme Changes: From new tax collected at source (TCS) rates to nomination of mutual fund folios, the following modifications will take effect on October 1.
The new rates for tax collected at source (TCS), the Know Your Customer (KYC) norms for mutual funds and demat accounts, the nomination of mutual fund folios, and several other significant financial changes will take effect on October 1. The facility of the Reserve Bank of India (RBI) to exchange or deposit withdrawn Rs 2,000 currency notes will cease the following month. Here is the inventory you require.
New Rates for Tax Collection at Source (TCS)
With the exception of expenses incurred for medical or educational purposes, which will incur a TCS of 5%, all overseas credit card purchases exceeding Rs 7 lakh will be subject to TCS of 20% beginning on 2 October. The government increased TCS rates during the announcement of the Union Budget 2023-24. It was originally scheduled to take effect on July 1, 2023, but was postponed until October 1.
With the new TCS rate International travel plans will get costlier and TCS on overseas tour packages will now attract a higher TCS rate. The following are the new TCS rates for LRS and international tour packages in India, effective 1 October 2023:
LRS for education funded by the loan will be zero up to Rs 7 lakh and 0.5% above Rs 7 lakh.
LRS for Medical treatment/Education (not financed by a loan) is 0% up to Rs 7 lakh and 5% above Rs 7 lakh.
LRS for other purposes will be five percent above seven lakh rupees and twenty percent above seven lakh rupees.
Purchases of overseas tour packages will incur a 5% charge up to Rs 7 lakh, and a 20% charge thereafter.
Birth Certificates Will Become a Single Document for Aadhaar and Government Employment
The Registration of Births and Deaths (Amendment) Act, 2023, which was passed by the Parliament during the Monsoon Session of this year, permits the use of a birth certificate as a single document for admission to an educational institution, issuance of a driving license, preparation of a voter list, Aadhaar number, marriage registration, and appointment to a government job. The act will become effective on October 1.
According to the government, the new rule will facilitate the establishment of a national and state-level database of registered births and deaths, thereby ensuring the efficient and transparent delivery of public services and social benefits, as well as digital registration.
Mutual Fund Nomination Deadline Ends September 30: Step-By-Step Guide To Nominate
Nomination of Mutual Fund Portfolios and Demat Accounts
In March, the Securities and Exchange Board of India (Sebi) extended the deadline for all individual demat account holders and mutual fund investors to file a nominee or opt out until September 30, 2023. Accounts and folios will be suspended if the deadline is not respected. This requirement pertains to both existing and new investors.
“Based on the assessment of trading as well as demat accounts in which choice of nomination details (i.e. furnishing of nomination or declaration for opting out of nomination) have not been updated and on the basis of the representations received from the stakeholders, it has been decided that the provisions mentioned at para 7 of SEBI circular dated July 23, 2021, read with para 3 (a) of SEBI circular dated February 24, 2022, with regard to freezing of accounts shall come into force with immediate effect.
When opening trading and demat accounts, new investors must either nominate their securities or formally opt out of nomination using a declaration form. Failure to satisfy this deadline will result in the freezing of debit folios for existing investors. In addition, demat accounts and mutual fund folios of investors will be frozen and inaccessible until they nominate or proclaim opt-out.
By submitting a declaration form to their demat account provider or mutual fund house, investors can also opt out of the nomination.
This action was taken by SEBI to assist investors in protecting their assets and passing them on to their legal successors. Before the deadline, it is crucial for all investors to comply with this requirement.
Number of Aadhaar for Small Savings Accounts
The central government has mandated the use of Aadhaar numbers for participation in minor savings schemes such as the Public Provident Fund (PPF), Sukanya Samriddhi Yojana (SSY), Post Office Saving Scheme, and Senior Citizens Saving Scheme (SCSS). Earlier this year, the Ministry of Finance issued a notification to this effect as part of KYC (Know Your Customer) for modest savings schemes. Prior to this, individuals could invest in small savings plans without submitting their Aadhaar number.
The Aadhaar enrollment number is now required to invest in government-sponsored modest savings schemes. Additionally, the notification made it plain that anyone who invests over a certain amount will also be required to provide their PAN card. If they miss this crucial deadline, their modest savings investments will be frozen.
Currency exchange of Rs 2000 notes
The Reserve Bank of India (RBI) has established September 30, 2023 as the final day to exchange or deposit Rs 2000 banknotes. The Reserve Bank of India has advised the general public to exchange or deposit their Rs 2000 notes by the specified deadline. This is possible at any bank location or RBI office.
While the Rs 2,000 remains a legal tender, it is not yet known if the central bank will extend the exchange deadline. After the deadline, the RBI will presumably provide an update on the future of Rs 2000 notes.
