Five financial changes that may impact you this October

New TCS structure for foreign remittances 

Effective October 1, international remittances or payments (all put together) of up to Rs 7 lakh per financial year per individual will not attract any TCS. Bookings of overseas tour packages have a separate Rs 7 lakh threshold ― 5 percent TCS for spends up to Rs 7 lakh and 20 percent thereafter. This is irrespective of the mode of payment used.

The government has provided some relief to those using foreign currency and forex cards on their foreign trips by bringing all modes of payment under the TCS exemption threshold of Rs 7 lakh, and 20 percent beyond this threshold.

There is no change in the TCS rate while remitting abroad for education purposes and medical treatment.

There is still no clarity from the government on TCS on credit card payments beyond the Rs 7 lakh threshold.

Will RBI maintain status quo on policy repo rate? 

As a small relief to home loan borrowers, the RBI did not raise the repo rates in its April, June, and August monetary policy announcements. The RBI has held the repo rate unchanged at 6.5 percent.

It remains to be seen whether the RBI will maintain the status quo on policy repo rate or hikes it in October to control inflation. If the RBI hikes interest rates, banks will once again increase interest on home loans and other loans linked to the repo rate as an external benchmark, as per the terms of the loan agreements.

Also read | Want low home loan interest rates? A good credit score helps

Birth certificate to become an important document

In the last monsoon session, Parliament passed the Registration of Births and Deaths (Amendment) Act, 2023. So, effective from October 1, birth certificates will be the only document you will need to produce to avail several crucial services, which include applying for an Aadhaar card, admission to an educational institution and registration of marriage.

It will be also useful to apply for government jobs and driving licence.

Spend smartly this festive season

In October, thanks to Navratri and Dussehra, e-commerce websites, retail chains, and independent neighbourhood stores are rolling out festive shopping offers. Make a budget and track your shopping expenses during the festival season. Prepare a list of gift items that you need to buy and, thus, avoid impulsive spending. Use cards from partner banks for additional discounts and cashbacks. Redeem reward points for additional savings. Avoid shopping for things you may not use immediately and zero-cost EMI schemes as they are debt traps.

Also read | Festive shopping offers from Amazon and Flipkart kicks in: How to make the most of shopping credit cards

RBI extends deadline to return Rs 2,000 notes

The RBI has extended the deadline for the public to exchange or deposit Rs 2000 notes at bank branches till October 7 following a review. The central bank said Rs 2000 banknotes will continue to be legal tender.

The RBI, in May, said it is withdrawing Rs 2,000 notes from circulation. The central bank also asked banks to stop issuing Rs 2,000 denomination bank notes with immediate effect. The RBI gave four months (May to September) to exchange or deposit your Rs 2,000 notes in your bank account.