5 Changes that will Impact Your Personal Finances from 1st October

5 Changes that will Impact Your Personal Finances from 1st October

1. Negative – Discounts on Fuel using Credit Cards to Stop

Post the Demonetisation exercise a discount of 0.75% was provided on the fuel purchase at the filling stations or petrol pumps as they are commonly known in India. However, post-October 1st, this discount will not be applicable to credit card payments. One needs to note that they may continue getting the 0.75% discount by payments made using debit cards and other digital payment modes like digital wallets and UPI. This change does not impacts the points accrued on the credit cards, so if your credit card gives you reward points for fuel purchase then those benefits are likely to continue.

Recent announcements made by the government of India has not only brought fresh cheer to the business community but it also impacts your personal finances. Here are the 5 major changes that will impact your personal finances from October

2. Positive – Government Employees who pass away will also get Pension

This is a piece of great news for government employees and their families, while earlier it was mandatory to complete 7 years of service to be eligible for a pension from the government, with this change if a government employee passes away before completing the mandatory seven years of service will also be eligible for the enhanced pension. This change has been notified via a notification on 17th September by the amendment to the Central Civil Services or the Pension rules.

Not just this it also covers the government employees who passed away before completing the mandatory seven years of service within 10 years of October 1, 2019. This will help a lot of families to live a life full of dignity and is a great development.

3. Positive – Mis-selling of Travel Insurance by online portals to stop

Online Travel portals were often mis-selling travel insurance by automatically selecting it along with the travel bookings, thus a user was made to purchase the travel insurance even without them knowing about it and giving an informed choice for making the right decisions.

Thus, to curb this practice the Insurance Regulatory Authority of India or IRDAI published a circular dated September 27, 2019, to impose restrictions on the online portals to sell travel insurance as a pre-selected option along with travel bookings.

The circular also terminated all the group insurance arrangements that are not in compliance with the new arrangements. It is a welcome relief for millions of online travel buyers who were cheated by the online portals to mandatorily buy the travel insurance without making them know about the same.

4. Positive – Loans to be linked with External Benchmarks

October 1, 2019, onwards, any loan like a personal loan, housing loan or an auto loan obtained from a bank will now be integrated to one of the 4 external benchmarks stated by the Reserve Bank of India (RBI). As per the circular issued by the Reserve Bank dated September 4, 2019, banks can now benchmark the interest charged on the loans to any one of these: RBI’s repo rate, Government of India three-months Treasury Bill yield published by the Financial Benchmarks India Private Ltd. (FBIL), Government of India six-months Treasury Bill yield published by the FBIL and Any other benchmark market interest rate published by the FBIL.

This change means that there can be changes in interest rates at least once every 3 months, and even more than once within a given 3-month period. For Instance, if a borrower takes a loan in September then the borrower will be eligible for a rate cut of the declared bps from November onwards on the basis of the repo rate cut that happened in October monetary policy review.

5. Positive – Unique Number on Income Tax Communication

To make the income tax notices traceable and easy for users and the agencies to track them, all the income tax notices or any correspondence starting 1st of October will carry a unique Document Identification Number or DIN. Any communication without a DIN will be invalid and users can access all communication under their login in the income tax portal. This is a welcome change and brings much-needed transparency for the department.

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