Some amendments to laws on cheque clearance, Goods and Services Tax, Unified Payment Interface, et cetera will come into effect from January 1, 2021 and these can potentially influence the life and finances of the common man.
Check out what five of these improvements/alteration are:
1. Positive pay system for cheques
The Reserve Bank of India announced that the Positive Pay System for cheques would commence from January 1, 2021. The new cheque clearing rules will ask for validation of key information for payments above Rs 50,000. This move aims at tracking fraud and harassment cases resulting from cheque payments.
Banks must enable this system for all their account owners who issue cheques of more than Rs 50,000. Although availing of this facility which keeps your money safe is voluntary and left to the discretion of the account holder, there is a likelihood that banks could make validation of important information compulsory for payments of more than Rs 5 lakh.
2. Digital payments transaction limits
The RBI recently announced the expansion of the contactless card transaction limit from Rs 2,000 to Rs 5,000 to promote digital payments acceptance.
What this means is that from January 1, 2021, customers can make transactions of up to Rs 5,000 using contactless cards without any additional two-factor authentication.
Contactless card payment lets a customer pay for services or goods using his/her debit or credit card with RFID technology (also called ‘chip’ card) without needing to swipe the card and enter his/her PIN to authenticate the transaction, or sign a transaction receipt.
For repeated transactions via cards and centralised payment interface, the RBI has also raised the cap for Unified Payment Interface.
Previously, the RBI claimed that customer experience was enhanced and their convenience improved with the online purchases and e-Mandates on cards and UPI for recurrent transactions.
3. UPI payment additional fee
For transfers made to third parties, such as Amazon Pay, Google Pay and Phone Pe, you now have to pay an additional charge.
From January 1, 2021, the Indian National Payments Council has officially agreed to levy an additional fee on UPI payment services.
4. Update on the GST law for small firms
Just four GST returns (or GSTR-3B) will be required for companies with up to Rs 5 crore revenue to file from January 1, 2021, rather than 12 now. Therefore, with the effect of January 1, 2021, only eight returns (four GSTR-3B and four GSTR-1 returns) will be expected in one year from small businesses.
5. Vehicle prices to rise
In the New Year, buying a new car will be more expensive as automobile firms like Maruti Suzuki India and Mahindra have announced that their goods will have higher input costs. The car producers did not increase prices until the removal of COVID-induced lockdowns because the sales rebound was disrupted.
6. FASTags mandatory for four-wheelers
From January 1, 2021, FASTags will become mandatory for all four-wheelers, irrespective of when they were bought.
A FASTag is a reloadable, prepaid vehicle tag that allows the automatic collection of toll charges using Radio-Frequency Identification (RFID) technology. It allows cashless payment at toll booths, thus helping you save time during traffic. You will not have to stop your car to pay at toll plazas anymore.
These can be bought from banks or even from e-commerce sites like Amazon. (With inputs from PepperContent)