Five ways your money life changed from today

Come 1 April and our money lives change every year invariably. Some changes are major, while others are minor. Here’s a list of five such changes that happened today.

Lower earnings

Like it or not, starting form today, when you invest in small savings, you will get a lower rate compared with what you would have got yesterday. Just last week the Finance Ministry announced that for 2013-14, it has cut interest rates on a number of small savings. For instance, Public Provident Fund earned a tax free interest of 8.8 percent, but from now on it will earn 8.7 percent. National Savings Certificate would get you a rate of 8.5 percent. Likewise, rate on five-year postal recurring deposits now stands at 8.3 percent. And, the Senior Citizens Savings Scheme will now earn 9.3 percent in FY 2013-14. Now a reduction of 0.1 percentagepoint may not sound like a big deal, but with high rate of inflation, even that hurts.

[caption id=“attachment_680920” align=“alignleft” width=“380”] Like it or not, starting form today, when you invest in small savings, you will get a lower rate compared with what you would have got yesterday. Flickr Images[/caption]

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Higher spending

Insurance: If you are a car owner, starting today, you will have to shell out a little more for motor insurance goes. Just last week insurance regulator IRDA permitted a 20 percent increase in third-party auto insurance rates.

The rate hikes were brought about keeping in mind the rise in the inflation and also the number of claims. This hike in third-party rates is also applicable for two-wheelers as well as passenger and commercial vehicles.

For two-wheelers, the premiums would be hiked by around Rs 800. While the hike for four-wheelers is between around Rs 900 and Rs 15,000, depending on the type of the vehicle. Keep in mind that third-party insurance has to be bought on compulsory basis and you have no options but to comply.

Eating out: If you think that motor insurance is the only thing which became expensive from today, think again. Even eating out has become expensive as there is a service tax levied on all air conditioned restaurants. “At present, service tax does not apply to air conditioned restaurants that do not serve liquor. The distinction is artificial, and I propose to levy service tax on all air conditioned restaurants,” the Union Budget said. This means, from today will have to pay a service tax when you visit any air-conditioned restaurants. As per a story published in Economic Times today, ( see here), you will have to bear the burden of paying a service tax, even on pizza delivery, take away and at canteens. “McDonald’s, which also has kiosks and takeaways, has decided to impose tax across all segments,” the report said.

More changes

Apart from the three changes mentioned above there are two more changes you should expect to fall in place in a few months. First being, you will have to be compliant to the new Cheque Truncation System (CTS) cheques or simply put digital cheques, by July 31. The previous deadline was March 31. To know more about CTS cheques, read here.

Also starting June 1, you will have to pay a tax in the form of tax deducted at source (TDS) of 1 percent on transfer of immovable property (apart form agricultural land) for value more than Rs 50 lakh. This means, if you buy such a property, you will have to bear the additional headache to withhold the applicable amount, deposit it to the tax authority and then file the returns.