4 important financial deadlines in September: Act now for mutual fund nominations, sovereign gold bonds, and new TCS rules

As September arrives, it’s crucial to remember the impending personal finance deadlines, as this could be your final chance to take action. Delaying could lead to unnecessary hassles, while prompt action can save your time and energy for other important life tasks. Here are a few key points to keep in mind as September begins:

Update nominees in your mutual fund portfolios: The deadline for mutual fund nominations is September 30. Regulatory guidelines require investors to specify nominees for their fund portfolios or inform the fund house of their choice to opt out of nominations by this date.

Nomination is the process of designating someone to manage your assets in the event of your passing. For new funds, making a nomination is mandatory. If an investor chooses not to nominate, they can skip the process while filling out the form. Nomination registration simplifies fund transfer to nominees upon the investor's demise. Without a nominee, heirs must provide documents like a will, legal heir certificate, and NOCs to transfer units to their name.

Nominations can be completed through various methods. Websites of Registrar and Transfer Agents (RTAs) like CAMS and KFintech offer this feature, requiring a one-time password (OTP). Alternatively, MF Central—an investment management platform by CAMS and KFintech—allows updating nominations using your PAN. After logging in, select your mutual funds, update nominee details, and verify with an OTP.

The nominee deadline, initially set for March 31, was extended to September 30. According to a circular, the freezing of folios, as mentioned in the SEBI circular of June 15, 2022, will be enforced from September 30, instead of the previous deadline of March 31. “AMCs and RTAs shall encourage the unit holder(s) to fulfil the requirement for nomination/ opting out of nomination by sending communications on a fortnightly basis through emails and SMS to unit holder(s) who are not in compliance with the nomination requirement. The communication shall provide guidance on providing nomination or opting out of the nomination,” the circular adds.

Missing the September 30 deadline will freeze your existing folio, preventing switches or redemptions. AMCs and RTAs might have reminded non-compliant investors via emails and SMS to fulfil the nomination requirement or opt out, offering guidance in the process. Act before it's too late.

New tranche of sovereign gold bonds

Remember to set aside some money this month, if you've been planning to invest in gold for a while. This is because the second tranche of the Sovereign Gold Bond Scheme (SGB) 2023-24 - Series II, supported by the central government, opens for subscription from September 11 to September 15, following the RBI's announcement on June 15, 2023. The issue price has not been announced yet. Once the subscription window opens, seize the opportunity to invest, as it is one of the most cost-effective and efficient ways to invest in paper gold.

SGBs are issued by the Reserve Bank of India on behalf of the government as an alternative to purchasing physical gold. Introduced in November 2015, SGBs aim to reduce the demand for physical gold and redirect a portion of domestic savings from gold purchases to financial savings. One of the standout features of SGBs is the 2.5 per cent interest per annum, paid semi-annually on the nominal value. They come with an 8-year lock-in period, but exit options are available in the 5th, 6th, and 7th year.

The minimum investment permissible is 1 gram of gold, with subscription limits set at 4 kg for individuals, 4 kg for HUFs, and 20 kg for trusts.

Also read: What happens to an NRI’s life insurance policy if they become a foreign citizen?

Also read: I’m 42 and don’t have a job. I have Rs 53 lakh in savings. How can I save for my daughter and manage daily expenses?

New TCS rules

The new TCS rules for foreign travel will take effect from October 1. Thus, this is your last month before these new rules come into play. It's essential to pay a 5 per cent TCS on foreign tour packages before October 1, 2023. Following that, the new rules will entail a 5 per cent TCS up to Rs 7 lakh, and thereafter, 20 per cent TCS will be applicable. However, remember that TCS is not an additional tax; it can be adjusted against your total income tax liability or reclaimed while filing income tax returns (ITR).

If the idea of paying more due to this tax doesn't sit well with you, consider buying forex in advance this month. Sudarshan Motwani, Founder and CEO of BookMyForex.com, told Business Today, “TCS will not apply to forex transactions below Rs 7 lakh in a financial year. If you plan to travel or transfer money abroad and need to buy forex worth more than Rs 7 lakh, you can place your orders in advance. Following RBI’s guidelines, you can purchase currency up to 60 days before your trip. If you travel before November 30, you can buy forex worth more than Rs 7 lakh by September 30 and avoid paying 20 percent TCS.” The Union finance ministry has increased TCS on foreign exchange (forex) transactions by amending Section 206C of the Income Tax (I-T) Act.

For those planning after September, there's an option to split ticket and hotel bookings to avoid TCS. TCS will be levied on tour packages and not on separate transactions for tickets and hotel bookings. This way, you could save on TCS, but you'll have the responsibility of planning your itinerary yourself. Another option is to book through a foreign tour operator, as international credit card transactions with foreign tour operators are exempt from TCS. In the meantime, you can continue using credit cards, as they don't attract TCS. Just be aware of the high forex mark-up associated with these cards.

Last month to exchange Rs 2000 currency notes

The RBI has clearly mentioned that people can approach any banks or post offices to deposit or exchange their Rs 2,000 notes till 30th September 2023. On May 19, the RBI declared the withdrawal of Rs 2,000 denomination banknotes from circulation, allowing individuals until September 30 to deposit or exchange them for different denominations. The central bank confirmed that these notes would remain as legal tender during this period, but did not clarify their status beyond September 30.

Finally, the last date for filing of GSTR-1 and GSTR-3B will be 11th and 20th September.