Five changes to your finances that you should be aware of in October

 Five changes to your finances that you should be aware of in October

They consist of the new foreign remittance tax structure that is collected at source, how you spend throughout the festival season, and monitoring the RBI's announcement of its monetary policy for any repo rate increases.

The Liberalized Remittance Scheme (LRS) will begin accepting overseas remittances on October 1 under a new tax collected at source (TCS) framework.

In April and June 2023, the Reserve Bank of India (RBI) did not adjust the policy repo rate rise. However, going forward, you must pay attention to whether the central bank will announce a hike or whether the hiatus in rate hikes will last.

If you currently have a loan or intend to get one, the announcement will have an effect on your finances. Additionally, keep an eye out for any updates from the central bank regarding exchanges or deposits of Rs. 2,000 currency notes. Spend wisely as the festival season gets underway.

Let's take a closer look at those changes that could hurt your wallet in October 2023.

New TCS architecture for international transfers 

Beginning on October 1, overseas transfers or payments (all of them combined) up to Rs 7 lakh per person and per fiscal year are exempt from TCS. Bookings for international vacation packages have a separate Rs 7 lakh threshold, after which TCS rates increase to 20% from 5%. No matter the method of payment, this is true.

By putting all forms of payment under the TCS exemption level of Rs 7 lakh and 20 percent over this threshold, the government has offered some relief to travelers who use foreign money and forex cards.

The TCS rate remains unchanged when sending money abroad for medical care and educational purposes.

The government has still not provided any clarification regarding TCS's acceptance of credit card payments over Rs 7 lakh.

Will the RBI keep the policy repo rate at its current level? 

In its monetary policy announcements in April, June, and August, the RBI did not hike the repo rates, which is a modest respite for borrowers of house loans. The repo rate has remained at 6.5 percent by the RBI.

It is uncertain if the RBI will keep the policy repo rate at its current level or increase it in October to rein in inflation. According to the provisions of the loan agreements, banks will raise interest rates on home loans and other loans that are tied to the repo rate as an external benchmark if the RBI raises interest rates.

Birth certificates will eventually be significant documents.

The Registration of Births and Deaths (Amendment) Act, 2023 was approved by Parliament during the most recent monsoon session. Therefore, starting on October 1, birth certificates will be the only document you will need to present in order to receive a number of important services, such as applying for an Aadhaar card, receiving admission to a school, and registering a marriage.

Applying for a driver's license and government positions will also be helpful.

Spend wisely during the holiday season.

Due to Navratri and Dussehra, online retailers, national chains, and small neighborhood shops are launching holiday shopping promotions in October. Create a spending plan and keep track of your purchases during the festival season. Create a list of the gifts you must purchase to prevent impulsive spending. For further savings and cashback, use credit cards from partner banks. Spend reward points to get more discounts. Avoid zero-cost EMI plans and buying for items you might not use right away because they are debt traps.

RBI extends the deadline for returning notes of Rs 2,000

Following a review, the RBI extended the time for the general public to exchange or deposit Rs 2000 notes at bank branches to October 7. The Rs 2000 banknote will still be accepted as legal tender, according to the central bank.

In May, the RBI announced that it was removing Rs 2,000 notes from circulation. Additionally, the central bank instructed banks to immediately stop issuing banknotes having a value of Rs. 2,000. The RBI allowed you to swap or deposit your Rs 2,000 notes in your bank account for a period of four months (May to September).