The end of 2023 is just a week away. Before you pack your bags and escape to snow-capped mountains for a vacation, it’s crucial to spare time to meet some of the deadlines relating to your personal finances before you bid adieu to 2023. Here is the must-do list and how you could go about implementing it.

Update nominees for demat, MFs

SEBI, in its circular dated September 26, 2023, once again extended the deadline for demat account holders to either furnish nominee details or opt out of nomination. The extended deadline stands at December 31, 2023. It must be highlighted here that this is the fourth time SEBI has extended the deadline, so it is wise not to postpone the task till the eleventh hour, in anticipation of another extension.

Initially, SEBI mandated that trading and demat accounts that do not have “choice of nomination” by March 31, 2022, shall be frozen. Later, following input from exchanges, depositories, brokers’ associations, and other stakeholders, deadlines have been repeatedly extended — to March 31, 2023, then to September 30, 2023, and now to the year-end.

However, SEBI, in its latest circular, stated that the submission of ‘choice of nomination’ for trading accounts has been made voluntary. This means that investors trading only in futures and options for which a trading account alone is sufficient, need not submit the nominee details mandatorily, but those who hold demat accounts must meet the deadline.

Similarly, mutual fund investors, who haven’t declared their nominees so far, are required to provide the same before December 31, 2023. If the investor does not wish to have a nominee for the mutual fund folio, he/she needs to give a declaration stating the same by the said date. Failing this deadline — which has already been extended three times this year — will lead to their accounts being frozen for debits and investors will not be able to redeem their investments.

You can complete the process online by visiting CAMS and Kfintech websites. Investors with a Common Account Number (CAN) can also use MF Utilities or MFCentral. This involves two-factor authentication and verifying nominee details with a one-time password (OTP). Alternatively, you can fill out a physical form with a wet signature and submit it to the Registrar and Transfer Agents (RTA) or the respective brokerage and fund houses.

Renew bank locker agreement

At the onset of this year, the Reserve Bank of India (RBI) mandated banks to renew their agreements with safe deposit locker holders by December 31, 2023. This directive followed a Supreme Court ruling on February 19, 2021, regarding a locker-breach case in which one of the banks broke open the locker of an individual citing pending dues.

The Court, while delivering the judgment, instructed the RBI to establish comprehensive regulations within six months. Subsequently, in August 2021, the RBI, considering advancements in banking technology, customer grievances, and feedback, revised the agreement. Initially set for implementation on January 1, 2023, the deadline was later extended to the current year-end.

It should be noted that the new agreement explicitly prohibits storing illegal/hazardous items in lockers while in the old agreement, there was no such specific mention. Additionally, banks are now liable for one hundred times the annual rent for loss due to negligence such as fire, theft, fraud, and more (except natural disasters). In the case of inoperative lockers for a long period, the RBI has increased the allowable duration from three to seven years before proceeding to the discharge of locker contents. This means that despite timely rent payments, the bank reserves the right, after providing advance notice, to forcibly open the locker if it remains inoperative and attempts to establish contact with the locker hirers prove unsuccessful.

Existing customers availing locker facilities with various banks can download the “Safe Deposit Locker Agreement” from their respective bank websites and visit their designated branch to submit the completed and stamped agreement. The RBI has instructed banks to bear the cost of stamp papers while executing supplementary agreements with existing locker hirers only. For others, the cost of stamp paper will be borne by the customers. The RBI has also advised banks to aid customers in electronically executing agreements. If you are away from the town you have the locker facility in, you can check with your bank as to how best you can do it in electronic mode. Furthermore, a copy of the executed agreement would also be provided to you for your records.

Activate UPI ID

The National Payments Corporation of India (NPCI), in its circular dated November 7, 2023, alerted the Third-Party Application Providers (TPAPs) and Payment Service Providers (PSP), including PhonePe, Google Pay, and Paytm (combined market share of 97 per cent as of September 2023), to deactivate those UPI IDs and UPI-linked phone numbers that have been dormant for a year. It’s noteworthy that UPI transactions (in value terms) are setting new highs month after month with ₹17.40 lakh crore recorded in November.

Conversely, the number of UPI frauds is also rising, with 95,402 cases registered in the financial year ending March 2023 (the latest available is only up to February 2023), though the fraud-to-sales ratio is minuscule. Furthermore, unintended fund transfers can occur if a user switches their phone number without dissociating it from UPI records. Consequently, NPCI decided to deactivate invalid UPI IDs to protect the interests of UPI users.

To avoid the deactivation of UPI IDs, customers just simply need to initiate at least one transaction via their so far inactive IDs before the year-end.

File belated ITR

Individuals who have missed filing their income tax return (ITR) by July 31 this year, have a final chance to file a belated ITR for the financial year 2022-23 (Assessment Year 2023-24) by December 31, 2023. It’s important to remember that filing a belated ITR attracts a penalty of ₹5,000 if the total income is above ₹5 lakh or ₹1,000 if the total income falls below it.  

You can file your belated ITR online through the official e-filing website of the Income Tax Department. You will need to select the “Belated Return under section 139(4)“ option when filing your return. Individuals who find it difficult to file taxes on their own can rely on e-return intermediaries approved by the I-T Department, such as ClearTax, TaxSpanner, EASYTAX, and myITreturn. Do note that in addition to the penalty, you will need to pay the applicable interest (known as penal interest), levied at 1 per cent per month. on the outstanding tax amount. Post submitting the ITR, one must also verify the return within 30 days of submission through offline or online mode.

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