Do auto-payments of your utility bills and OTT subscriptions get?
ClearTaxExplains As per the Reserve Bank of Indias press release, there will be a change in the auto-debit facility from 1 October 2021 nationwide. The press release stated that there would be a requirement for additional factor authorization (AFA) to make payments safe and secure. The AFA is applicable for cards, wallets, unified payments interface (UPI), and prepaid payment instruments (PPI) during registration and first transaction. Subsequent transactions will have relaxation up to a maximum limit of Rs.5,000. Banks will be required to send a notification 24 hours before the transaction is processed. The transaction is complete once the subscriber agrees, making sure the subscriber approves the transaction. The notification provided by the bank will include the name of the merchant, the amount, date of debit, reference number and the reason for the debit. The subscriber will have the option to cancel before the recurring payment is processed, bringing in more flexibility for consumers. It is advisable for the subscribers to ensure that the mobile number linked with the payment instrument is working and correct to receive the notifications. The most common recurring payments affected will be utility bills like electricity, gas and subscription payments like OTT streaming services like Netflix, Amazon Prime, Apple Music, Spotify, Disney + Hotstar, etc. This move can be alarming for services that depend on the recurring payment mode. Consumers will have to consent to renew their subscriptions every time, which may decrease subscriptions in the future. For recurring payments such as mutual fund SIPs, insurance premiums, etc., for payments above Rs.5,000, the new rule will not impact the auto-debit facility if you have given standing instructions. Do follow our space - ClearTax- Simplifying Finance to get all your finance question answered Download Black app by ClearTax: File income tax returns, save more taxes, build wealth with mutual funds, and much more.