 "Personal finance: Here are the money changes and PF deadlines for June 2023")
Several regulatory changes are likely to impact your money management this month. Not only will your car insurance get more expensive this month, but you can also start investing for your child in mutual fund schemes from your own account rather than having to open a joint account for the same.
Third-party motor insurance has gone up this month
Private cars with an engine capacity of 1,000 cc will attract rates of Rs 2,094 compared to Rs 2,072 in 2019-20.
Similarly, private cars with an engine capacity between 1,000 cc and 1,500 cc will attract rates of Rs 3,416 compared to Rs 3,221, while owners of cars above 1,500 cc will see a drop in premium from Rs 7,897 to Rs 7,890.
Two-wheelers over 150 cc but not exceeding 350 cc will attract a premium of Rs 1,366, and for two-wheelers over 350 cc, the revised premium will be Rs 2,804.
After a two-year moratorium due to the pandemic, the revised TP insurance premium came into effect from June 1, 2023.
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A discount of 7.5 per cent on the premium shall be allowed for hybrid electric vehicles. While private electric cars not exceeding 30KW will attract a premium of Rs 1,780, those exceeding 30 KW but not 65 KW will attract a premium of Rs 2,904.
The third-party insurance cover is for other than own damage and is mandatory, along with the damage cover that a vehicle owner must purchase. This insurance cover is for any collateral damage to a third party, generally, a human being, caused due to a road accident.
"Climate change has caused serious weather-related losses worldwide. The continuing Russia-Ukraine war has also increased the exposure to losses. Consequently, reinsurance costs for the insurers have gone up, which is passed on to customers. A 10-15 per cent increase is expected in motor insurance. This means that the lifetime cost of ownership of the vehicle will also go up," said Adhil Shetty, CEO, BankBazaar.com.
Electric two-wheelers will get more expensive this month
The government has reduced the subsidy on the purchase of electric vehicles. On May 21, the government notified that the subsidy on the FAME India (Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles in India) Scheme would be revised to Rs 10,000 per kilowatt per hour (kWh) as against Rs 15,000/ kWH starting June 1. (l) Furthermore, the cap for incentive has been brought down to 15 per cent of the ex-factory price of the model as against 40 per cent offered earlier. OEMs like Ola, Ather, TVS, etc., have already increased the prices of e-scooters and e-motorcycles by 10-15 per cent.
Parents can invest from their own accounts in mutual funds for children
Market regulator Sebi has allowed parents or legal guardians to invest from their own bank accounts in mutual fund schemes for their children from June 15, 2023. Parents will no longer have to open joint accounts or open the account of minor children for this purpose.
"Payment for investment by any mode shall be accepted from the bank account of the minor, parent or legal guardian of the minor, or from a joint account of the minor with a parent or legal guardian," read the Sebi circular, dated May 12, 2023.
Sebi also said that for existing folios, the AMCs should insist upon a change of pay-out bank mandate before redemption is processed.
However, all redemptions from mutual fund investments made in the name of a minor shall be credited only to the verified bank account of the minor, which means the account the minor may hold with the parent/legal guardian after completing all KYC formalities.
New rules for safe deposit lockers
New rules for safe deposit lockers require customers to sign a new agreement with their banks by June 30, 2023.
The changes come after a 2021 Supreme Court ruling clarifying the responsibilities and liabilities of banks and their locker users. Under the old norms, banks acted as custodians of the locker and assumed a larger liability in the event of damage to stored items. However, the new regulations redefine the relationship between a lessor and a lessee. Customers are only allowed to use the locker as long as they pay the rent. At the time of locker allotment, the RBI has permitted banks to obtain fixed deposits (FD) capable of covering three years' rent and charges for breaking open the locker, if needed.
Banks have introduced new safe deposit locker agreements, specifying that customers can only use lockers for legitimate purposes, such as storing jewellery and documents. Storage of cash or currency is not permitted.
Moreover, arms, weapons, drugs, contraband, perishable or radioactive materials or any material that could create a hazard or nuisance to the bank or customers cannot be stored.
The customer's license to use the locker is non-transferable and only for their own use.
The bank will have to compensate the locker-holder in case of incidents like fire, theft, burglary, robbery, dacoity, building collapse, negligence by the bank, or fraudulent activity by its employees. The bank's liability will be equivalent to 100 times the prevailing annual rent of the safe deposit locker.
Pay your first advance tax instalment by June 15, 2023
ClearTax defines advance tax as the income tax paid in advance instead of a lump sum payment at year-end. It is the tax that you pay as you earn. These payments have to be made in instalments as per the due dates provided by the income tax department.
Self-employed professionals, salaried employees, and businesses whose estimated tax liability for the financial year exceeds Rs 10,000 must pay advance tax in instalments during the year. For salaried employees, the employer will deduct the required taxes, and they do not need to pay advance tax if they do not have other sources of income. The advance tax has to be paid in four instalments - and the first instalment of 15 per cent has to be paid by June 15, 2023.
Apply for a higher pension under EPF by June 26, 2023
The Employees' Provident Fund Organisation (EPFO) has extended the deadline to apply for a higher pension from the Employees' Pension Scheme (EPS) to June 26, 2023, from May 3, 2023. People who were EPFO members and EPS subscribers before September 1, 2014, and who continue to be in service, but had missed choosing the higher pension option earlier, can apply for a higher pension. Those who retired before the said date, but had signed up for the option, must validate the information. The employer will validate, and then EPFO field officers will assess the information.
RBI's '100 Days 100 Pays' campaign to settle unclaimed deposits has begun
Under the scheme, which began on June 1 2023, banks will trace and settle their top 100 unclaimed deposits in every district of India. Balances in savings/current accounts which have not been operated for ten years or term deposits not claimed within ten years from the date of maturity are termed "unclaimed deposits".
Banks transfer the unclaimed amounts to the "Depositor Education and Awareness" (DEA) Fund maintained by the Reserve Bank of India. RBI has been encouraging the public through its public awareness initiatives occasionally to identify and approach the concerned bank for claiming such deposits.
Aadhaar-Pan linking deadline
After several extensions to the Aadhaar-PAN linking deadline, the Income Tax Department has set June 30 2023, as the new deadline for seeding the two important documents. After missing the June 30 deadline, individuals will still have the option to link their PAN with their Aadhaar by paying a fine of Rs 1,000. The I-T department will not process tax returns until PAN and Aadhaar are linked.
You can update your Aadhaar card details online for free till June 14, 2023
The Unique Identification Authority of India (UIDAI) has made online updation of Aadhar documents free till June 14, 2023. This service is free only on the myAadhaar portal and will continue to attract a fee of Rs 50 at a physical Aadhaar centre.