As the festive season approaches, October brings a host of financial updates that will impact your budget. From savings rates to borrowing costs and new tax rules, here is a breakdown of the key changes you need to watch out for this month.
For Savers: A Stable Outlook
Good news for
those with small savings accounts: the government has decided to keep interest rates unchanged for the third quarter of the fiscal year, running from October 1 to December 31, 2026. This means popular schemes will continue to offer the same returns. The Public Provident Fund (PPF) will maintain its interest rate of 7.1%, while the Sukanya Samriddhi Yojana (SSY) and the Senior Citizens Savings Scheme (SCSS) remain attractive at 8.2%. Similarly, the National Savings Certificate (NSC) will continue to yield 7.7%. This decision provides stability for investors who rely on these government-backed instruments for long-term savings and tax benefits. For those with larger sums, the Reserve Bank of India (RBI) has revised the definition of 'bulk deposits' to ₹3 crore and above, up from the previous ₹2 crore threshold, effective October 1. Banks now have to disclose interest rates for these large deposits daily, ensuring greater transparency.
For Borrowers: Brace for Higher EMIs
Borrowers may need to tighten their belts as signs point towards a potential rise in interest rates. The RBI's Monetary Policy Committee (MPC) is scheduled to meet in October, and with inflation concerns, some economists predict a repo rate hike. An increase in the repo rate, the rate at which the RBI lends to banks, typically leads to higher interest rates on home, auto, and personal loans linked to it. Projections suggest a possible 25-basis-point increase, which could make your Equated Monthly Instalments (EMIs) more expensive. For perspective, on a ₹50 lakh home loan with a 20-year tenure, a 50-basis-point (0.50%) hike could increase the monthly EMI by approximately ₹1,600. In other updates, the RBI has clarified rules around loan moratoriums. A new rule, effective since July 2026, requires banks to automatically offer relief to borrowers in areas officially declared disaster-affected, without them needing to apply first. This is a permanent framework for disaster relief, distinct from the one-time COVID-19 moratorium.
For Shoppers and Spenders: New Rules and Charges
Shoppers using the Unified Payments Interface (UPI) for larger transactions should take note. Starting October 15, a Merchant Discount Rate (MDR) of 0.4% will apply to certain UPI payments over ₹2,000 made to merchants. It is important to note that this charge is paid by the merchant, not the consumer, and person-to-person transfers remain free. Additionally, bank customers should be aware of a few service charge changes. Some State Bank of India (SBI) salary account holders will see a reduction in the number of free ATM transactions at other banks' ATMs. For SBI's Basic Savings Bank Deposit (BSBD) account holders, cash withdrawals remain free for the first four transactions each month, with a charge of ₹15 plus GST on each subsequent withdrawal. Looking ahead, major changes are coming to e-commerce in January 2027. New rules will curb manipulated search results, require clear identification of sponsored products, and mandate transparency on discounts by showing the lowest price from the previous 30 days.
For Taxpayers and Property Buyers: Compliance Updates
There are also important updates on the tax front. For resident individuals and Hindu Undivided Families (HUFs) purchasing property from a non-resident Indian (NRI), the compliance process for Tax Deducted at Source (TDS) has been simplified. Effective October 1, buyers can use their PAN for TDS compliance instead of being required to obtain a separate Tax Deduction and Collection Account Number (TAN). This change streamlines the process but does not remove the obligation to deduct and deposit the applicable tax. Separately, for taxpayers who are subject to a tax audit, the deadline for filing their Income Tax Return (ITR) has been extended to November 21, 2026. These administrative changes are designed to simplify compliance and ease the burden on taxpayers.
