HomeInvestingPersonal Finance8 money changes to watch out for in June

8 money changes to watch out for in June

In April, the Reserve Bank of India (RBI) decided to leave the policy repo rate alone; nonetheless, it is important to monitor if this pause will be maintained or whether the RBI will decide to increase the rate. If you currently have a loan or are planning to get one in the near future, this news will have an effect on you.

Additionally, you need to be aware of the amended locker agreement as well as the new restrictions for investing in mutual funds under the names of minors. You also need to pay the first installment of the tax advance, among other things.

What exactly are those alterations that will take a toll on your finances come June 2023?

RBI monetary policy: will pause continue or the rate be raised?

The Reserve Bank of India is scheduled to release its second monetary policy statement of the fiscal year 2023–24 on June 8.

When the Reserve Bank of India (RBI) announced that it would maintain its policy repo rate at 6.5 percent at the first semi-monthly monetary policy review of fiscal year 24 (FY 24), borrowers breathed a sigh of relief.

In April 2023, contrary to the expectations of the sector, the Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) halted rates. The MPC termed the decision ‘temporary’ and maintained its ‘removal of accommodation’ posture, taking into consideration the instability created by a financial crisis in the United States and Europe as well as the possibility of contagion.

You need to keep an eye on the monetary policy meeting that the MPC will hold in June to see whether or not the hold on rate increases will be maintained. In accordance with the provisions of the loan agreements, banks will once again raise the interest rates on house loans and other loans linked to the repo rate as an external benchmark in the event that there is a further rise in the target federal funds rate.

Sign revised locker agreements

Customers who have lockers at the branches of State Bank of India (SBI), Bank of Baroda, and a few other banks are being encouraged to sign new locker agreements by the respective institutions before the deadline of June 30, 2023. It won’t be long until all banks start doing the same thing.

The Reserve Bank of India (RBI) announced in January 2023 that it will extend the deadline for banks to finish the process of renewal in a staggered way by the end of 2023. The first major milestone will be reached on June 30, 2023, when it will be necessary to renew fifty percent of the agreements.

As you go through this article, be sure to keep these essential considerations front and centre as you work to extend the locker agreement.

New rules for MF investments in minors’ names done by parents

Investments in mutual funds will be able to be made from the bank account of a minor, the parent or legal guardian of the minor, or a joint account that the minor has with a parent or legal guardian, according to a new rule that will go into effect on June 15 and was introduced by the Securities and Exchange Board of India (SEBI), the regulatory body that oversees the capital markets in India.

In the past, the conventions of the banking industry required that the money be sent via a bank account that was opened in the child’s name. It has been noticed that one of the challenges associated with investing money in the name of a kid is the lack of a bank account that is opened in the child’s name.

Also read: SEBI encourages AMFI to establish an ethical committee in order to identify rotten apples in a timely manner.

Before processing any redemption requests pertaining to existing mutual fund folios, the fund houses will be required to provide a change of pay-out bank mandate as a prerequisite.

In addition, all of the revenues from the redemption of the child’s tokens will have to be deposited into the minor’s verified bank account, which is the account that the minor may have in conjunction with their parent or legal guardian after all Know Your Customer requirements have been met.

SEBI seeks comments on consultation paper on deterrence of insider trading at MFs

The Securities and Exchange Board of India (SEBI) has suggested the establishment of monitoring and internal control systems in order to detect frauds such as front-running and insider trading. The Securities and Exchange Board of India (SEBI) has stated that such a system should at the very least be able to detect front-running, insider trading, the misselling of products, the misuse of information by an Asset Management Company (AMC), its employees, distributors, brokers, dealers, and so on, and delay in the execution of orders by brokers and dealers.

The deadline for comments on the proposed changes has been set for June 3 at the latest.

SEBI invites views on proposals to overhaul expense ratio mechanism

The regulatory body only recently released a proposal in which it indicated that a scheme’s total expense ratio (TER) should include fees such as brokerage, Goods and Services Tax (GST), Securities and Transaction Tax (STT), and incentives provided for attracting investments from so-called B-30 cities. This recommendation was made public. Due to the current structure of the TER, these costs continue to be incurred in addition to the basic expense ratio.

In addition to this, SEBI has recommended the creation of a regulatory sandbox centred on performance-based fees for mutual funds. If a mutual fund firm is able to exceed the benchmark, they have the ability to charge a higher TER. In the history of the mutual fund sector in India, there has never been any precedent for such an agreement. At the time of redemption by the investor, the regulator has indicated that either the fund house would charge a higher TER and give back the excess above base TER if the scheme underperforms, or the fund house would charge base TER and more if the scheme outperforms, depending on which scenario the regulator believes is most likely to occur.

SEBI had originally requested comments by the 1st of June; however, the deadline has now been extended to the 6th of June.

June 15 is the deadline for the first advance tax instalment

You are misinformed if you are a person who receives a salary and you believe that the “Advance Tax” clause does not apply to you. A person who has a salary as their principal source of income but also has earnings from other sources, such as interest from deposits, rental income, capital gains, and so on, may find themselves in a position where they are required to make an advance tax payment. Therefore, you are required to provide an estimate of your potential future tax due.

According to Section 208 of the Income Tax Act of 1961, an individual is obligated to make an advance tax payment if they anticipate having a tax due for the next fiscal year that will be more than Rs 10,000 after accounting for tax that has been withheld and collected at the source (both known as TDS and TCS).

The yearly anticipated tax burden that must be paid in advance must be paid by taxpayers in a total of four installments. A fifteen percent payment of the advance tax is due on or before the 15th of June by the taxpayer.

In accordance with Section 234C, you will be subject to a punitive interest charge on the taxes that are owed if you fail to make advance tax payments or if you delay them for more than a month and a part of a month.

Apply for higher pension on actual salary by June 26

The Employees’ Provident Fund Organisation (EPFO) extended the deadline for selecting the highest pension option from May 3 to June 26. This was done so that participants would have more time to make their decision.

Employees who were members of EPFO and the Employees’ Pension Scheme (EPS) before September 1, 2014, and who continue to be in service despite having missed an earlier opportunity to avail themselves of the higher pension choice are eligible to apply. Those individuals who had already retired prior to this date and chosen to receive the higher pension choice will be required to verify the information.

You will be required to make a decision on whether or not you want to submit a joint application with your employer in order to claim a larger pension based on your real pay. You will need to make this decision before the deadline. You will have until June 26 to finish this procedure by using the online facility that is made available on the member portal of the EPFO.

Your payment to the Employees’ Provident Fund (EPF) is now being taken out of your basic income at a rate of twelve percent by your employer. Additionally, the organisation will donate an amount of equivalent value to your retirement savings account. The remaining portion goes into your provident fund, while 8.33 percent of it is contributed to the employee stock purchase plan. On the other hand, it is based on the maximum salary allowed by law, which is Rs. 15,000 per month. Consequently, the Employee Pension Scheme (EPS) receives Rs 1,250 (8.33 percent of Rs 15,000) from your employer’s contribution at the moment. This cash is added to the pool that was established by EPS in order to provide monthly pension payments to member-employees who have worked for the company for at least ten years and the dependent members of their families.

However, as a result of the Supreme Court’s ruling in November 2022, you now have the option to contribute 8.33 percent of your real pay to the pension pool. This might result in a pension that is much greater once you reach retirement age. In addition, 1.16 percent of your employer’s contribution will be transferred into EPS, while the remaining 2.51 percent will be transferred into your employee retirement account (ERA).

You have until June 26 to make a decision about this option. In the event that you find flaws in your application, you have the option to remove them and submit them again. If, on the other hand, your employer has already verified the application, you will not be able to make this change. Following this, the officials of EPFO will review your application and, if it meets their standards, they will grant it, paving the way for a larger pension.

It is difficult for workers to exercise their decision since the procedure and final pension formula continue to be shrouded in a number of ambiguous areas.

Lounge access list changed for Axis Bank credit cardholders

Credit card customers of Axis Bank are granted free lounge access at a variety of airports in India. However, depending on the kind of card you have, you may only get a certain amount of free lounge access each year.

The bank has updated the airport lounge access programme that is available to credit cards beginning on June 1, 2023; the programme will remain in force until August 31, 2025. You may check the specifics of the lounge access that comes with your credit card on the website of the bank, or you can ask the customer care department about it.

Aryan Jakhar
Aryan Jakhar
Aryan Jakhar is an Indian Journalist with over two years of active working experience. Aryan is currently working as editor-in-chief at BusinessHeadline.in and he is reachable on contact@businessheadline.in
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