May brings with it a few notable financial changes that will impact your wallet. While April may have been packed with larger changes, this month still holds a few key shifts worth noting. From higher ATM transaction fees to potential relief in home loan rates, it’s essential to stay informed. Plus, as the tax season approaches, the time to get your documents ready for ITR filing is now. Here’s a breakdown of the key money changes in May.
1. ATM Transaction Fees on the Rise
Starting in May, expect a hike in fees for ATM transactions that exceed your free limit. Many private and public sector banks have increased charges on out-of-network ATM transactions. Currently, most banks offer free ATM withdrawals for up to five transactions per month in metro cities and three in rural areas. Beyond that limit, customers will now incur higher charges for every additional transaction.
This move comes as banks look to curb their ATM maintenance costs, which have risen over time. While the charges vary between banks, it’s advisable to check with your bank about the exact fee for additional withdrawals to avoid surprises. As more people turn to digital payments and online banking, these increases may encourage more users to move towards cashless transactions.
2. Home Loan Rates Likely to Dip
On a brighter note for home loan borrowers, May brings a positive shift in the housing finance sector. Several private banks and non-banking financial companies (NBFCs) are expected to announce cuts in home loan interest rates for both new and existing customers. This could be a great opportunity for prospective homebuyers to lock in a low interest rate, as the market stabilizes after the fluctuating rates seen in the previous months.
Banks like HDFC, ICICI Bank, and Axis Bank are expected to reduce rates for new customers, while existing borrowers may benefit from a rate revision upon request. It’s worth noting that the Reserve Bank of India’s (RBI) stance on monetary policy will continue to influence these rate cuts, but experts predict that the dip in home loan rates will remain in place for the foreseeable future.
If you’ve been waiting for a good time to refinance your home loan, now could be the right moment to do so. Be sure to consult with your bank about the possibility of reducing your rate and the associated costs.
3. ITR Filing: Be Prepared for the Tax Season
As May progresses, the deadline for filing your Income Tax Returns (ITR) draws closer. The last date to file your ITR for FY 2024-2025 is typically July 31, but it’s always advisable to prepare in advance. Starting now will give you ample time to ensure that all your documents are in order.
Also Read: Indian Banks’ RoA to Dip Despite Rate Cuts: Crisil Explains Why Margins Are Under Pressure
Here are a few important tips for hassle-free ITR filing:
- Collect the Right Documents: Make sure you have all your necessary documents ready, including your Form 16 (from your employer), bank statements, interest certificates, and investment proofs.
- Claim Deductions: Check for eligible deductions under sections like 80C (for investments in LIC, PPF, etc.), 80D (for health insurance premiums), and 24(b) (for home loan interest). These can significantly reduce your taxable income.
- Verify Your Form 26AS: This form reflects all the tax deductions made on your behalf. Ensure that it matches your records.
- File on Time: Filing your returns before the deadline ensures that you avoid penalties. In case you’re unable to meet the deadline, the last date for late filing with a penalty is usually December 31, but it’s always best to file early.
This is also the perfect time to explore if there are any changes to tax regulations that might affect your filing process. The government frequently updates rules, and staying informed will ensure you don’t miss out on potential savings or relief measures.
4. Interest Rates on Fixed Deposits May See Movement
While home loan rates may be on the decline, fixed deposit (FD) interest rates are also undergoing a shift in May. Several private banks have started offering slightly higher rates on FDs, especially for long-term deposits. This could make them a more attractive option for those looking to park their savings in low-risk instruments.
Interest rates for FDs vary depending on the tenure and amount invested. As the RBI continues to adjust its monetary policy, it’s likely that FD rates will see further fluctuations. If you are planning to invest in a fixed deposit soon, it’s advisable to compare rates across different banks to find the best option.
5. Changes in GST Rates and Compliance Rules
In May, businesses will need to stay updated on potential changes to Goods and Services Tax (GST) rates and compliance regulations. The GST Council often meets in the first half of the year to discuss tax adjustments, and businesses must be ready to adapt. Ensure that your business is compliant with all new rules, as failing to do so could result in penalties or fines.
6. Mutual Fund Updates and SIP Adjustments
If you are an investor in mutual funds, be aware of any changes in the schemes you’re invested in. Some fund houses may adjust their strategies or even introduce new schemes to take advantage of current market conditions. It’s an excellent time to review your investments and make necessary adjustments.
If you’re investing through a Systematic Investment Plan (SIP), you might want to consider increasing your monthly contribution if your financial situation allows. This could benefit you in the long term as the markets evolve.
Conclusion
While May may not be as eventful as April, the financial landscape continues to evolve. From increased ATM fees to potential home loan rate cuts, it’s important to stay vigilant. Additionally, with the tax season approaching, now is the time to get your documents in order for a smooth ITR filing process.
Whether you’re looking to save on ATM charges, take advantage of lower home loan rates, or ensure you’re prepared for tax season, staying on top of these changes will help you make informed financial decisions throughout the month.
