Financial To Do’s Before the Year Ends

In a matter of days, we will be concluding the year 2023 and ushering in the New Year of 2024. As of January 1, 2024, several notable changes will be implemented. These changes encompass offering nomination choices for Demat account holders, deactivating inactive UPI IDs, instituting new agreements for bank lockers, and cessation of paper-based KYC processes for SIM cards. 

A checklist of financial tasks to complete by December 31. 

1. Nomination Options for Demat Account Holders and Mutual Funds: 
   On September 26, the Securities and Exchange Board of India (SEBI) extended the deadline for Demat account holders to choose a nominee by three more months, now until December 31, 2023. Additionally, SEBI has granted an extension until December 31 for physical security holders to submit PAN, nominee details, contact information, bank account details, and specimen signatures for their respective folio numbers.  

2. Dormant UPI IDs:
   In a circular dated November 7, the National Payments Corporation of India (NPCI) has instructed payment applications and banks to disable UPI IDs and numbers that have remained inactive for over a year. All banks and third-party apps are required to comply with these directives by December 31st. 

3. Agreement for Safe Deposit Box at the Bank:
   As per the Reserve Bank of India (RBI), updated regulations for safe deposit lockers mandate customers to execute a fresh agreement with their respective banks. Utilization of the locker is contingent upon the regular payment of rent, and customers are required to finalize the agreement by December 31, 2023. 

4. Belated ITR Filing Deadline: 
   The deadline for submitting Income Tax Returns with penalty fees for the fiscal year 2022-23 is approaching on December 31, 2023. As per Section 234F of the Income Tax Act, individuals who do not file their returns by the due date will incur a late filing fee. Those missing the deadline face a penalty of ₹5,000, while taxpayers with total income below ₹5 lakh will be subject to a reduced penalty of ₹1,000. 

5. Elimination of Paper-Based KYC for SIM Card Activation:
   Starting from the first day of 2024, mobile phone users can obtain new SIM cards without having to complete traditional paper forms. A notification from the Department of Telecommunications (DoT) indicates the discontinuation of the paper-based know-your-customer (KYC) process effective January 1. The decision is based on various amendments and changes in the KYC framework, leading to the cessation of the paper-based KYC process outlined in instructions dated August 9, 2012. 

As the year draws to a close, completing these financial tasks by December 31st ensures a proactive and organized approach to managing your financial well-being. By ticking off this checklist, you pave the way for a more secure and prosperous financial future. Remember, these small yet significant actions can make a big difference in setting the stage for a successful year ahead. Here's to a financially sound and fulfilling year!