July is anticipated to be a month filled with extraordinary activity. However, you will read this article when the mentioned changes are already in effect from 01st July. In addition to being the period when the newly elected government will present its first Union Budget, it also marks the deadline for income-tax filing.
How July Can Affect Your Money and Finances:
Budget Impact
In June, the National Democratic Alliance (NDA), led by the Bharatiya Janata Party (BJP), took office. Finance Minister Nirmala Seetharaman is anticipated to present the Union Budget 2024 in July. This budget may bring several changes that could impact your finances. For example, last year, the government increased the tax rebate limit from Rs 5 lakh to Rs 7 lakh under the new tax regime. Experts suggest there is now a case for raising the basic exemption limit under both tax regimes.
Additionally, there is hope for increased deductions on medical expenses. With the continuous rise in medical costs, taxpayers are optimistic about higher deductions for health insurance premium payments and medical expenses that better reflect current realities. Presently, taxpayers can claim deductions of up to Rs 25,000 per year for health insurance premiums paid for themselves and their families, as well as for their parents, under Section 80D. For senior citizens, the deduction limit is Rs 50,000. It is important to note that Section 80D benefits are exclusively available under the old income-tax regime.
The Pension Fund Regulatory and Development Authority (PFRDA) is advocating for an increase in the tax-free cap on employers’ contributions to the National Pension System (NPS) for private sector employees, proposing a rise from the current 10 percent to 12 percent of basic salary and dearness allowance, if any. Additionally, investors are calling for more lenient taxation rules on debt mutual funds and have requested a distinct tax deduction category for life insurance premiums, as the Section 80C category is already crowded with other tax-saving options. Another long-standing demand is the tax-free status for annuity income.
Prepare to file your income-tax returns for FY 2023-24
Prepare to file your income-tax returns for the financial year 2023-24. Although you have until the end of July for assessment year 2024-25, it’s advisable to begin the process sooner rather than waiting until July 31. This approach helps avoid potential glitches or high traffic on the I-T return filing portal as the deadline approaches. Filing early reduces the risk of last-minute rush and associated errors.
SEBI has announced that nominations are now optional for joint mutual fund portfolios.
SEBI issued a circular on June 10, announcing that it will no longer freeze mutual fund portfolios and demat accounts of investors who have not submitted nominations. This decision applies to both existing investors and unitholders, following feedback from market participants who emphasized the importance of simplifying compliance and enhancing investor convenience.
According to SEBI’s circular, investors holding securities in physical form will continue to receive dividends, interest payments, and redemption payments. They will also have the right to lodge grievances. SEBI had previously extended the deadline until June 30 for mutual fund investors to complete or update their nominations, but investors no longer need to be concerned about their funds being frozen in July.
Citibank’s credit cards will be rebranded as Axis credit cards
Citibank credit cards will transition into Axis credit cards, with the migration expected to finish by July 15. Axis Bank has introduced new card variants to facilitate the transfer of Citi credit card users to its services, offering nearly identical benefits. After migration, the existing Citi cards will retain their current PIN, number, expiry date, and CVV.
Furthermore, the billing cycle, statement generation date, and payment due date will remain unchanged. After migration, your reward balances from all banking products will be combined and accessible through the Axis Bank mobile banking app and Axis Bank Edge rewards portal. Interest rates for statements generated post-migration will align with Axis Bank’s current rates.
YES Bank has revised its policy regarding lounge access for credit cardholders
Starting from July 1, YES Bank credit cardholders can enjoy complimentary domestic lounge access by spending Rs 35,000 or more within a calendar quarter. This spending in one quarter will unlock lounge access for the subsequent quarter. YES Bank has raised the spending threshold from Rs 10,000 to Rs 35,000 per calendar quarter. The eligible quarters for meeting this spending requirement are March 21 to June 20, June 21 to September 20, September 21 to December 20, and December 21 to March 20 (in 2025).
Cardholders who meet this requirement will receive lounge access benefits in the following quarter. This updated policy applies to the periods from July 1 to September 30, October 1 to December 31, January 1 to March 31 (in 2025), and April 1 to June 30 (in 2025). The eligible credit cards are YES Marquee, YES SELECT, YES Reserv, YES First Preferred, YES Bank ELITE, YES BYOC, and YES Wellness Plus.
HSBC Bank no longer rewards points for certain merchant categories on credit card transactions
Effective July 1, HSBC Bank credit cardholders should be aware that certain transactions will no longer earn reward points. These transactions encompass categories such as education and government-related payments, insurance premiums, e-wallet loads, fuel purchases, tax payments, utility bills, and other specified categories.
Conclusion
July 2024 marks a pivotal month with significant financial implications. From potential tax reforms and optional nominations in mutual funds to credit card transitions and revised lounge access policies, proactive planning is crucial. As deadlines for income tax filing approach and new banking regulations take effect, early action can mitigate risks and optimize financial strategies for the year ahead.
