5 changes that will impact your personal finances from October 1

The Economic Times 01/10/2019

From today, that is October 1, there are five changes that will have a bearing on your personal finances.

Here is a look at those five changes and how it can impact your financial decisions and finances.

External benchmarking of loans

As directed by the Reserve Bank of India (RBI), all floating rate loans, i.e., personal, housing, auto etc. disbursed by banks from October 1, have to be linked to an external benchmark. The external benchmark can be RBI's repo rate, 3 or 6 month treasury bill yield or any other market interest rate benchmark published by the Financial Benchmarks India (FBIL).

As per the RBI directive, banks have to reset the interest rates linked to the external benchmark at least once in three months. Therefore, any change in the external benchmark rate will impact your EMI (equated monthly instalment) every three months or less, as specified in the agreement with the bank.

DIN or unique number for income tax notices

Starting from October 1, all income tax notices, letters or any other official tax related correspondence will carry a unique number called 'Document Identification Number' or DIN. This number will be computer generated and will be verifiable on the income tax department's e-filing website.

Any communication on or after October 1 from the income tax department which does not carry the DIN can be treated as invalid. There are provisions for issue of manual notices however these are subject to certain conditions and will require special permission. These manual notices too are to be regularised later.

The tax department has already launched the facility to verify the DIN on its e-filing website.

No discount on credit card for fuel payments made

According to a PTI report, the 0.75 per cent discount being given on credit card payments made to buy fuel at petrol pumps will be withdrawn from October 1. Such discounts were introduced by oil companies more than two and half years ago post demonetisation. However, discounts on payments made via debit cards and other digital modes of payment will continue.

Good news for government pensioners

Starting from October 1, families of government employees who pass away before completing seven years of service, will also be eligible for enhanced pension. The government has amended the Central Civil Services (Pension) rules via a notification dated September 19, 2019.

According to the notification, families of government pensioners who died before completion of service of seven years within 10 years before October 1, 2019 will also be eligible for family pension at enhanced rates with effect from October 1.

Curb on selling of travel insurance via online ticket portals

IRDAI in its circular dated September 27, 2019 has imposed curbs on selling of travel insurance as pre-selected default option at the time of buying of tickets on online portals. The circular has stated that all the group insurance arrangements that are not in the compliance with the norms shall be terminated with effect from October 1, 2019.

The circular puts curbs on mis-selling of travel insurance policies by online portals selling travel tickets.