Here is a list of 10 important  changes happening in you personal finance – ranging from insurance, taxation and motor vehicle laws – happening from September 1, 2019. Ignore them at your own peril. Read on.

1) Standalone own-damage vehicle insurance

Starting September 1, you can get a standalone own damage cover for your vehicle on an annual basis. The Insurance Regulatory Development Authority of India (IRDA) has allowed insurers to issue standalone own damage policies for two-wheelers and cars –both new and old, on an annual basis. Effective September 1, 2019, the issuance of bundled policies for cars and two-wheelers will not be compulsory. Further, insurers will have the option to offer package policies, in addition to stand-alone own damage and third party policies. The IRDA has, however, said that long term stand-alone Own Damage policy will not be permitted for the present.

2) Buying China-made iPhones in the US will be expensive

Many people buy unlocked iPhones from the U.S. to get cheaper prices than you have in India. They, then bring it to India and use it here. U.S. President Donald Trump in August said he will add a new tariff on $300 billion of Chinese-made products on September 1, which would effectively put a tax on all Chinese goods coming into the United States. The new tariffs could hit consumers in the U.S. harder as it would tax goods like iPhones and other consumer electronics, sneakers, and toys.

3) SBI repo-rate linked loan rate to become lower

The new home loan product from SBI is linked to the bank’s repo rate lending rate (RLLR), which in turn is linked to RBI’s repo rate. RLLR is 225 bps over repo rate. When there is a change in RBI’s repo rate, SBI’s RLLR changes from the first day of the following month. For example, RBI cut repo rate by 35 bps earlier this month and accordingly SBI’s RLLR will change from September 1. SBI’s repo rate lending rate was 8% as on July 1, 2019. From September 1, 2019, after the RBI’s 35 bps cut on August 6, SBI’s RLLR will fall to 7.65%.

4) Up to 10-times traffic fines

Beware traffic violators. Hefty fines await. The provisions of the Motor Vehicles Amendment Act 2019 that will be applicable from September 1 have been notified by the Ministry of Road Transport and Highways and include heavy monetary penalties for not following traffic rules. For driving without a license, there will be a fine of Rs 5,000 from the earlier Rs 500. The penalty for driving despite disqualification has been increased from Rs 500 to Rs 10,000. The fine for over-speeding will be between Rs 1,000 and Rs 2,000 for the light motor vehicles; for medium passenger or goods vehicles fine is between Rs 2,000 and Rs 4,000, with impounding of driving license for a second or subsequent offence. In the case of drunken driving, the penalty has been increased to imprisonment up to 6 months and/or fine up to Rs 10,000 for the first offence and imprisonment up to 2 years and/or fine of Rs 15,000 for the second offence.

5) Tax on taxable life insurance maturity proceeds

A higher TDS of 5%, up from 1% earlier, will be levied if life insurance maturity proceeds received in your hands are taxable. According to current tax laws, if the annual premium paid on the insurance policy is less than 10% of the sum assured the amount received on maturity are exempt from tax. TDS is already levied if the maturity proceeds exceeds Rs 1 lakh.

6) TDS applicable on club membership fee, car parking fee while buying home

From September 1, charges like club membership fee, car parking fee, electricity or water facility fee will also be included for calculation of TDS. The Government has revised 194-IA of Income Tax Act to include all charges of the nature of club membership fee, car parking fee, electricity or water facility fee, maintenance fee, advance fee etc., which are incidental to transfer of the immovable property, under immovable property, for levy of the TDS. TDS is already levied at the rate 1% if the value of the property exceeds Rs 50 lakh.

7) Online train ticket booking costlier

Online train tickets bought through IRCTC will get costlier as the Indian Railways has decided to restore service charges from September 1. The IRCTC will levy a service charge of Rs 15 per ticket for non-AC classes and Rs 30 for AC classes, including first class, according to the August 30 order issued by IRCTC. Goods and Services Tax (GST) will be applicable separately. The service charges were withdrawn three years ago to promote digital payments.

8) PAN and Aadhaar interchangeable

In Union Budget 2019, Finance Minister Nirmala Sitharaman had proposed to allow interchangeability between Permanent Account Number (PAN) and Aadhaar with effect from September 1. Those who don’t have PAN can now quote Aadhaar in transactions that otherwise require quoting of PAN. An example of such a transaction can be cash deposit above Rs 50,000.

9) Cash withdrawal tax

Those who withdraw a total of more than Rs 1 crore from banks or post offices will be liable to a 2% tax deducted at source (TDS). Thankfully, since the provision comes into effect from September 1, cash withdrawals prior to that will not be subjected to TDS. However, withdrawals made so far this fiscal i.e. financial year, will count in computing the Rs 1 crore threshold for the new levy. The provision imposes TDS on total cash payments above Rs 1 crore by banks, cooperative banks or post office to any person from one or more accounts. The levy falls under Section 194N in Income Tax laws.

10) 5% TDS

The Government has introduced a new Section called 194M in income tax laws. Under this, an individual is required to deduct TDS at the rate of 5% for paying a sum in excess of Rs 50 lakh for carrying out any work in pursuance of a contract or by way of fees for professional services during a financial year. Payments made on or after September 1 will attract the provisions of Section 194M.

Kumar Shankar Roy

Kumar Shankar Roy is contributing editor with RupeeIQ. Kumar is a financial journalist, with a functional experience of 15 years. He tracks mutual funds, insurance, pension, PMS, fixed income/debt and alternative investments markets closely. He has worked for The Times of India, The Hindu Business Line, Deccan Chronicle Group, DNA, and Value Research, among others, across different cities in India. He is deeply interested in marrying data insights with actionable opinion. He can be contacted at [email protected].

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