Personal financial enthusiasts have many money-related changes they should be aware of that can affect their bank accounts and investments. From credit card rules announced by two banks to changes happening in KYC rules and tasks to be completed by the end of May here are changes that you should be aware of. Apart from the deadline to start special senior citizen fixed deposits, several banks like Yes Bank and ICICI Bank are implementing changes in savings bank account charges, and credit card rules effective from May 1, 2024. Let's take a look at some of the most significant changes regarding money that will affect you this month.
Major Financial Changes Coming in May 2024
KYC Changes: PAN – MF folio Name mismatch
Starting April 30, 2024, if there is any discrepancy between the name on mutual fund applications and your PAN (Permanent Account Number) card, it will result in the rejection of your application. The move aims to standardize names across official records, ensuring uniformity. As a result, if you are investing in a mutual fund folio for the first time, your name and date of birth must be identical to the that appears on your PAN, and by extension, to your income-tax records.
Notably this rule will only affect new investments and not existing ones. Mutual Fund Transfer Agencies (RTAs) like MF Central and CAMS said that directives from the Income Tax Department and Sebi's Master Circular on Know Your Customer (KYC) requirements state mutual funds have to validate the name and date of birth (DOB) against the PAN details. From May 1, 2024, three input parameters are required such as the Permanent Account Number, name as per the PAN card, and date of birth against the current two parameters without DOB.
TDS Penalty Deadline For Aadhar-Pan Link
As per income tax rules, if a Permanent Account Number (PAN) is not linked with Aadhaar, TDS have to be deducted at double the applicable rate from June 30, 2023, when PANs of those who had not linked Aadhar with PAN became inactive.
Any deductors should deduct tax at source (TDS) at double the rate when transactions occur. If deduction or collection has not been made at a higher rate, demands were raised by the I-T department.
If short-deduction or collection' of TDS or TCS was done while carrying out the transactions where the PANs of the deductees/collectees were inoperative deductors are not liable to pay penalties if the PAN is linked with Aadhar before May 31, 2024. So deductors should reach out to deductees to ensure PAN is linked with Aadhaar before May 31.
HDFC's Senior Citizen Care FD
Investment opportunities in HDFC Bank's senior citizen care fixed deposit cannot be done after May 2, 2024. This special deposit for senior citizens offers a 0.75 per cent higher interest rate for those aged 60 years and above.
Anyone who wants to invest in a fixed deposit of less than Rs 5 crore for a tenure of five years to 10 years.
Increase In Credit Card Surcharges
Yes Bank and IDFC First Bank have introduced surcharges on utility transactions exceeding specific thresholds effective from today, May 1. Yes Bank's surcharge of 1 per cent plus GST applies when utility bill payments cross Rs 15,000, while it does not apply to its private cards. The utility expenses are expenses involved with telecommunications, electric, gas, water, internet services and cable services. If the total of your monthly utility bill transactions, for such expenses, amounts to Rs 15,000 or less, there will be no surcharge applicable. However, if the total exceeds Rs 15,000, a 1 per cent surcharge will be imposed, and an additional 18 per cent GST will be charged on the surcharge.
IDFC First Bank's surcharge imposition limit is Rs 20,000 for the same conditions but does not apply to FIRST Private Credit Card, LIC Classic Credit Card, and LIC Select Credit Card.
Revision in Savings Account & Low Balance Fees
ICICI Bank will adjust charges on savings account services, including annual debit card fees to Rs 200 per annum and for rural locations, it is Rs 900. The chequebook charges will be zero till 25 leaflets in a year. The bank will charge between Rs 2.5 to Rs 15 per transaction for outward Immediate Payment Service (IMPS) transactions, depending on the transferred amount.
Yes Bank also announced an increase in charges to Rs 250 to Rs 1,000 for maintaining a less-than-mandated average monthly balance in savings accounts. Earlier the charges were Rs 250 to Rs 750. With ECS (electronic clearing service) returns, if there are insufficient funds, the bank will charge Rs 500 in the first instance and from then on Rs 550.
