Eight financial changes that may impact you this September

Execution-only platforms (EOPs) registration 

The Securities and Exchange Board of India (SEBI) in June had made it compulsory for execution-only platforms (EOPs) to get registered with the regulators and barred them from offering regular plans of mutual funds schemes as part of the new regulatory framework introduced for such platforms for direct mutual fund investing.

The regulator has divided EOPs into two categories. The category 1 EOPs would need to be registered with AMFI, the mutual fund industry body.

The category 2 EOPs would need to be registered as a stock broker with SEBI and can operate as an agent of investors and only through the platforms provided by the stock exchanges.

It is yet to be seen whether prices of direct plans will rise under the new EOP regulations.

This circular will come into force with effect from September 1.

Nomination for existing individual investors by September 30 

Providing nomination or opting-out confirmation has already been mandated in the case of new mutual fund (MF) investors for folios created from October 1, 2022. Nomination in folios held by investors where folio was created prior to October 1, 2022, must be complied with on or before September 30 by either submitting nominee details or by providing opt-out declaration.

It’s important to note that if the required details are not registered within the stipulated timelines, transactions like redemptions / systematic withdrawal plan (SWP) / switch / systematic transfer plan (STP) will not be permitted in the applicable folios from October 1, 2023.

Investors in stocks through demat accounts also need to make nominations or opt-out on or before September 30. The failure to do so would result in the freezing of the trading and demat accounts.

Also read | Updating nomination in jointly-held investments can be a pain; here’s what you need to do

Axis Bank reduces benefits on Magnus and Reserve credit card  

Effective September 1, Axis Bank has introduced some significant changes for its Magnus and Reserve credit card customers. For instance, the bank has hiked the annual fee for its Magnus credit card and raised the spend threshold for the waiver of the annual fee for both Magnus and Reserve credit cards. Also, certain credit card spends such as utility bill payments will no longer earn reward points, known as EDGE, and will not count towards meeting the annual fee waiver threshold. The transfer ratio for converting reward points into hotel and airline points/miles has been made less attractive, dropping from the current 5:4 to 5:2. This means that you will only receive 2 partner points/miles instead of 4 in exchange for 5 reward points. However, if you are an existing Burgundy customer (Axis Bank's wealth customer) or become one, you will continue to enjoy the existing miles conversion ratio of 5:4.

These changes are bound to disappoint Magnus and Reserve credit card users.

Last chance to invest in special high-rate FDs?

With the hike in repo rates since May 2022, several banks started increasing their FD rates and also introduced special FD schemes for specific investment tenures, targeting regular and senior citizens.

September may see several newly-launched FD schemes from select banks being discontinued. For instance, IDBI Bank’s Amrit Mahotsav FD new scheme of 375 days is valid up to September 30. In this scheme, senior citizens earn 7.60 percent interest per annum, and general, NRE and NRO category investors earn 7.1 percent interest per annum. Besides this, the existing Amrit Mahotsav FD for 444 days offers interest rates of 7.65 percent to senior citizens and 7.15 percent to general, NRE, and NRO customers till September 30.

Similarly, SBI’s WECARE FD scheme with tenures of 5 years and above is offered to senior citizens. Under this scheme, senior citizens can avail additional interest rate of 50 bps over and above the 50 bps premium offered to them on other FD tenures. Thus, senior citizens opting for SBI WECARE stand to earn a 100 bps higher interest rate than the rate bank's other FD holders. This scheme is available on fresh deposits and on renewal of maturing deposits. The last date to invest in this FD scheme is September 30.

Thus, September may be the last month to lock in your investments in special FD schemes offering high interest rates.

Also read | FD rates for Senior Citizens: Banks that offer up to 9.1% interest on 3-year deposits   

Small savings schemes depositors need to submit PAN and Aadhaar 

In May, India Post issued a circular to prop up the documentation required for completing the know-your-client (KYC) process while investing. The depositors holding an account with India Post were segmented into three categories – low, medium and high risk according to the investment values as defined by the India Post. These depositors will need to resubmit their KYC every seven, five, and two years, respectively.

Existing India Post depositors must submit their Aadhaar before September 30, 2023, if they have not already submitted it. In case they have not submitted their PAN, it is to be furnished within two months of meeting any of the following conditions: when the balance in any account exceeds Rs 50,000; when the aggregate of all credits in the bank account exceeds Rs 1 lakh in a financial year, or when the transfer or withdrawal from an account exceeds Rs 10,000 in a month.

The account will cease to be operational if the depositor fails to submit the documentation.

September 15 is the deadline for the second advance tax instalment 

If you’re a salaried individual and think the ‘advance tax’ provision is not applicable to you, you’re mistaken. Advance tax liability may arise for a person having salary as the primary source of income but also having earnings from other sources such as interest from deposits, rental income, capital gains and so on. So, you need to assess your advance tax liability.

According to section 208 of the Income Tax Act 1961, every person whose estimated tax liability for the financial year is Rs 10,000 or more, after taking into consideration tax deducted and collected at source (TDS and TCS), is required to pay advance tax.

Taxpayers are required to pay their annual estimated advance tax liability in four instalments. On or before 15 September, a taxpayer needs to pay 45 percent of the advance tax.

If you miss advance tax payments or delay them, there is penal interest on the taxes due, under section 234C, at the rate of 1 percent per month / part of the month.

Update your Aadhaar card details for free

In June, the Unique Identification Authority of India (UIDAI) had announced an extension to the deadline for free Aadhaar card update by three months till September 14, 2023. This service is, however, free only on the myAadhaar portal and attracts a fee of Rs 50 at physical Aadhaar centres. Starting from September 15, the updation of Aadhaar card will be chargeable with the same fees even on the myAadhaar portal.