As October 1, 2023, approaches, several significant personal finance changes are set to take effect, impacting various aspects of financial transactions, documentation, and more. These changes, ranging from tax collection rules to essential document requirements, could have far-reaching implications for individuals and businesses alike.
Here’s a rundown of the important personal finance rules that will come into play from October 1, 2023:
1. Tax Collection at Source (TCS) Rules
The Finance Ministry has announced that the new tax collection at source (TCS) rule will be implemented from October 1, 2023. This rule will have implications for a wide range of financial transactions, including overseas expenses. Under the Finance Bill 2023, the government has increased the TCS rate from 5 percent to 20 percent for remittances under the Liberalised Remittance Scheme (LRS) and for the purchase of overseas tour program packages. Additionally, the threshold of Rs 7 lakh for triggering TCS on LRS has been removed.
These changes are particularly relevant for individuals planning international travel, investing in foreign stocks, mutual funds, cryptocurrencies abroad, or pursuing higher education overseas. It’s important to note that these changes do not apply to remittances made for education or medical purposes.
2. Small Savings Scheme Requirements
Investors who have funds in small savings schemes like the Senior Citizens Savings Scheme (SCSS), Public Provident Fund (PPF), and National Savings Certificate (NSC) must submit their Permanent Account Number (PAN) and Aadhaar card details by September 30, 2023. Failure to do so will result in the suspension of their accounts from October 1, 2023. Account holders who have already provided their Aadhaar during account opening are exempt from this requirement.
The consequences of non-compliance include the inability to deposit or withdraw funds, non-crediting of interest, and restrictions on loans or premature withdrawals.
3. Birth Certificates as a Single Document
From October 1, 2023, the Registration of Births and Deaths (Amendment) Act, 2023, will be enforced nationwide. This act permits the use of a birth certificate as a single document for various purposes, such as admission to educational institutions, issuance of driving licenses, voter list preparation, obtaining an Aadhaar number, marriage registration, and government job appointments.
4. RBI’s Update on Rs 2,000 Notes
The Reserve Bank of India (RBI) had set September 30, 2023, as the deadline for depositing or exchanging Rs 2,000 notes. After this date, the notes will continue to be legal tender, but banks may decide not to accept them. The RBI will determine the future status of these notes based on the quantity returned or deposited in banks. Therefore, it is anticipated that the RBI may announce new rules regarding the usage of Rs 2,000 notes in the near future.
As these changes come into effect, individuals and businesses are encouraged to stay informed and ensure compliance with the evolving financial regulations. These adjustments aim to streamline processes, enhance security, and align with the evolving financial landscape.
