Five Money and Financial Related Changes That Came Into Effect In January 2023

The start of a new year brings with it new changes, resolutions and some new opportunities. When some people are busy making new year's resolutions, others are making a bucket list of things to do in the coming year. The beginning of a new calendar year also brings with it a slew of changes that we may have to bear directly or indirectly. Money matters are important, but it is even more important to stay up to date on any new financial changes. Here are five money and financial-related changes that will take effect in January 2023.

Changes in NPS withdrawal rules in 2023

Central government employees must submit a request for partial withdrawal of NPS funds to their associated nodal officers. In addition, applicants must submit valid documents to support their request for partial withdrawal.

Partial withdrawal is only permitted for specific reasons such as child marriage, child higher education, house purchase, and illness treatment.

Changes related to the passbook for mutual fund investing in 2023

From January 1, 2023, bank statements and passbooks will not be accepted as proof of address for the KYC process for investing in mutual fund schemes. However, an exception has been made for Hindu United Family (HUF) entities.

Passport, voter ID, driving licence, NREGA job card, National Population Register Letter, and proof of possession of Aadhar are valid documents for the KYC process of mutual fund schemes.

Changes in bank locker rules in 2023

Several bank locker holders have received messages from their banks asking them to renew their safe deposit box agreements in the last few days.

The Reserve Bank of India (RBI) has directed banks to renew customer locker agreements by January 1, 2023. The RBI's circular to banks in August 2021 followed a Supreme Court directive in February 2021, which directed the banking regulator to finalise rules for locker management in banks within 6 months of the order's date. The new rule went into effect for new customers on January 1, 2022, but banks were given until January 23 to comply with the directive.

The contract between the bank and the owner of the safe deposit box should be written on stamp paper. The customer is then given a duplicate copy of the signed agreement by both parties. The bank will keep the original copy. At the time of locker allotment, the bank shall enter into an agreement on duly stamped paper with the customer to whom the locker facility is provided. The locker-hirer must be given a copy of the locker agreement signed in duplicate by both parties so that he or she is aware of his or her rights and responsibilities. The original agreement must be kept at the bank branch where the locker is located.

Changes in the tax declaration rule in 2023

Most employers require employees to submit their tax returns in January. While the deadline is frequently extended to February or even March, it is preferable to complete the tax declaration as soon as possible.

Tax declarations include proof of investments, insurance policies purchased, or home loans taken out by the employee in order to qualify for tax breaks under sections 80C, 80D, and 24 of the Income Tax Act. If you fail to submit your tax declaration on time, more tax will be deducted from your pay. However, the same can be claimed when filing an ITR.

IRDAI's new KYC insurance rule

According to the Insurance Regulatory and Development Authority of India's (Irdai's) new rules, insurance buyers will be required to complete the know your customer (KYC) process beginning January 1, 2023.

Those purchasing health, travel, and auto insurance policies will be required to submit ID and address proof documents such as a PAN card, Aadhaar, Voter's ID, driving licence, and passport under the new rule.

Previously, customers were only required to submit PAN and Aadhar when filing a claim.