New Year 2024: Key Finance-Related Changes Set for Rollout From January 1

Some key changes are likely from January 2024 in personal finance. This month onwards, insurance companies are likely to provide an updated customer information sheet (CIS) to the policyholders of health insurance policies. In addition, salaried employees are also required to file investment proofs to save tax from 1 January. As mentioned in this post, some other changes are likely to roll out in the new year. Let’s take a look at them below:

Top Changes Likely From January 1

1. Small Savings to Incur Higher Interest Rates 

The investors of small savings schemes can enjoy higher interest rates in the New Year 2024. You can see a change in the interest rate of Sukanya Samridhi Yojana (SSY), which has increased from 8% to 8.20% for the first quarter of the new year. Further, the 3-year time deposit insurance will have a raised interest rate of 10 basis points to go up to 7.10% for the same quarter.

2. CIS or Customer Information Sheets to be Issued in a New Format by Insurers

Insurance companies are required to provide health insurance policyholders with an updated CIS or customer information sheet from January 2024. IRDAI has mandated that the insurers follow a new format for the CIS and policy documents to be offered to the insured while buying or renewing policies. This will allow the policyholders to understand policy terms in simple language.

The updated CIS will have information on the sum insured for individual and family floater plans. It will also have updates on plan benefits and conditions. The turn-around time or TAT for paying claims should also be mentioned in the CIS along with other details like exclusions, grievance redressal, portability, and others.

3. Fees and Expenses Charged by Fund Houses Should be Ensured to be Fair by Trustees 

With effect from January 1, 2024, trustees of AMCs or asset management companies must ensure that fair fees and expenses are charged to mutual fund holders. This was announced by SEBI or the Securities and Exchange Board of India. SEBI announced the roles of trustees and directors of AMC to address issues between the interests of AMC stakeholders and policyholders.

4. Cars will be Expensive 

As per announcements made by automobile firms like Audi, Mercedes Benz, Tata Motors, and Maruti, the prices of their vehicles will increase slightly in the first month of the new year because of higher input prices. The likely price hike speculation is around 2-3 %, while it may be high in some car models.

5. UPI will be Launched for the Secondary Market

‘UPI for Secondary Market’ is also getting initiated in January for the equity cash segment. This launch is taking place in support of other critical stakeholders like banks, stockbrokers, depositories, UPI app manufacturers, and so on.

6. Inactive UPI IDs for the Last 1 Year will be Deactivated

This is another important update regarding the UPI ID/account holders. The account holders who have not used their accounts for the past year will have their accounts deactivated this new year. So, if you have a Google Pay, PhonePe, or Paytm account you haven’t used, they will likely be deactivated soon. The circular regarding the same has been issued by NPCI (National Payments Corporation of India) on Nov 7, 2023.

This step is taken to avoid the occurrence of fraud using such apps. If the customer wants, they can re-register their UPI apps to use them for payments.

7. Health Insurance Policy Documents will be Simplified

As per specifications received by IRDAI, insurers will have to release revised CIS or customer information sheets effective from Jan 1, 2024, for health insurance policyholders. This will make it easy for customers to understand insurance policies by making the language simple.

As such, CIS involves some jargon or complex legal terms that will be eliminated in the revised sheets for the policyholders to comprehend easily.

8. Physical Verification for SIM Cards is Eliminated

This is another change to be witnessed by consumers in the coming year, and it will change the way you buy SIM cards for your mobile phones. As per a notification by the DoT or the Department of Telecommunications, telecom firms have to phase out consumer physical verification while selling SIM cards. Rather, the verification will be done digitally through KYC. The consumers can show their photo IDs to get digital verification done. This will eliminate SIM card fraud as well as customer acquisition costs of telecom companies.

9. Submit Timely Proof of Investment 

Generally, employers seek tax-saving investment proofs in January from taxpayers, especially those choosing the old tax regime at the time of investment declaration at the start of a budget year. Also, some employers do not even extend the deadline. Hence, it is best to complete the process soon. So, taxpayers are likely to file details of any investment done, any insurance policy purchased, or home loans availed to be able to claim deductions under various sections like 80D, 80C, 24, and so on. Failure to do so might lead to an excess tax deduction from the employee’s salary.

Popular General Insurance Companies India, 2024

Conclusion 

Now that you know the key finance-related changes expected in the new year 2024, you may plan your finances and other essential decisions accordingly to avoid inconvenience or to take benefit of the changes.

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