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How Can You Do Online KYC Verification For Demat Account?

Online KYC (Know Your Customer) is a process of submitting your identity documents and other relevant information to open and maintain a Demat account. This process involves submitting documents like PAN card, Aadhar card, passport, etc., and providing the necessary information like address, phone number, email address, etc. The online KYC of a Demat account helps you to open, close, and manage your account without having to go through a physical verification process. The online KYC process not only helps to open the Demat account faster but also helps to maintain the security of the account with its authentication process. [B-01] Why kyc is necessary for opening a demat account? Know Your Customer (KYC) is an essential process of verifying the identity and address of a Demat account holder. KYC is required to make sure that the account holder is who they say they are and to prevent fraud. KYC is important for the safety and security of the Demat account holder. It helps the financial institution to detect any suspicious activity in the account. KYC also helps the financial institution to protect itself from any potential legal or financial risks. KYC is also important to protect the customer from any identity theft or fraudulent transactions. By verifying the identity of the customer, the financial institution can ensure that the account is only used by the customer and not by any other person. KYC helps to ensure that the customer is aware of the terms and conditions of the Demat account and that they are aware of the risks associated with it. KYC also helps to ensure that the customer has sufficient knowledge of the stock market and the trading process. Advantages of online kyc of demat account It is a quick and easy process that reduces the time taken to activate a Demat account. It eliminates the need for paperwork and manual submission of documents. There is no need to physically visit the office of the broker or the depositary participant. It eliminates the risk of document fraud. It is convenient and secure. It helps to reduce the cost of opening a Demat account. It allows for the quick transfer of funds across multiple accounts. It helps to ensure compliance with the KYC norms and regulations. Documents required for kyc of a demat account The documents required for KYC of a Demat account are: Proof of Identity: This includes any government-issued document such as a passport, voter ID card, driving license, etc. Proof of Address: This includes documentary evidence such as a bank statement, utility bill, etc. PAN (Permanent Account Number) Card: This is issued by the Income Tax Department and is mandatory for opening a Demat account. Recent Photograph: A recent passport-sized photograph is also required for KYC. Bank Account Details: The bank account details are required to link the Demat account with the bank account. In addition to the above documents, additional documents may be required depending on the bank or financial institution. The customer may also be required to submit a signed declaration form that confirms that all the details provided are accurate. A step-by-step guide to do online KYC of a Demat account KYC (Know Your Customer) is the process of verifying the identity of a customer before initiating a business relationship. KYC is an essential step for any financial institution, as it helps to prevent fraud and money laundering. To open a Demat account, you need to go through the KYC process. Here is a step-by-step guide to help you do KYC for a Demat account online. 1. Gather the Required Documents: The first step is to gather the documents required for KYC. This includes valid identity proof such as Aadhaar card, passport, voter ID, PAN card, etc., and valid address proof such as Aadhaar card, passport, driving license, etc. 2. Upload the Documents: Once you have gathered the required documents, you need to upload them on the KYC portal of the Demat account provider. Make sure to keep the scanned copies of the documents handy while uploading. 3. Fill in the KYC Form: After uploading the documents, you will be required to fill in the KYC form. This form will contain personal information such as name, address, age, etc. upload your recent photograph or some apps or website has the option to take a live photograph. 4. Submit the Form: Once you have filled in the form, submit it. This will initiate the KYC process. 5. Wait for Verification: Once you have submitted the form, the Demat account provider will verify the submitted documents. This process may take a few days. 6. Receive Confirmation: Once the documents have been verified, you will receive a confirmation from the Demat account provider. This will indicate that you have completed the KYC process for your Demat account By following these steps, you can easily complete the KYC process for a Demat account online. It should be noted that KYC is an important step for any financial institution and must be done accurately and promptly. [B-02] Conclusion The online KYC of the Demat account is a simple and convenient process. It helps to open and manage the Demat account without any physical contact or paperwork. It is a safe and secure process that helps to protect the investor’s data and financial transactions. The online KYC of the Demat account helps to save time, energy and cost as compared to the traditional KYC process. Thus, the online KYC of the Demat account is a convenient and secure process that helps to open and manage the Demat account with ease.

08-11-2023

Other

How Can You Improve Your Investment Portfolio?

Investing is not a new phenomenon. It has existed for centuries and has only evolved in form. And while it might superficially seem as though investing is all about luck, there is a lot of strategy and skill involved with the process. In this article, we discuss some simple techniques that may help you improve your investment plan. [B-01] 1. Lower your investment fee It is easy to disregard the investment fee when one first starts investing. However, the investment fee can have a noticeable impact on your returns. For instance, let us consider that you manage to reduce your investment fee by 2% on a 500,000 rupee investment. You will be getting a return of 10,000 rupees extra every year. Over 20 years, this can amount to 200,000 rupees! 2. Diversify, diversify, diversify This is the easiest guideline in the rule book. But one that we often end up forgetting. In general, you should not put your eggs in one basket when investing. It can be easy to get carried away during a bull market. However, bull markets never last forever. Remember to place your investments in a variety of assets i.e. stocks, bonds, mutual funds, etc. 3. Level up your knowledge If you have access to more knowledge and resources, make sure you seize the opportunity. Any investor can benefit from a quality course in investing. This might include an online seminar or a course in a college or university. If you don’t have access to such resources, see if you can get your hands on a book on investing that you can read during your spare time. 4. Do not rely on experts This might seem counterintuitive. However, if you want your investment plan to flourish, it is important to know when to tune out unnecessary information. Most experts do not know what they are talking about. It is always better to trust your intuition when investing, and have a focus that is dictated by your interests. If there is an expert you trust, see if you can get in touch with them to check on their credibility. 5. Have a long-term plan While investing can have short-term benefits, it is largely a long-term practice. If you haven’t already, relook at your investment plan and ascertain where you would like to be in 20 years. Or even 5 years. Once you have determined your goal, it becomes easier to determine the amount of risk you are comfortable taking. And since this might change over time, you should constantly revisit your original investment plan and modify it as and when necessary. 6. Don’t stop investing It can be easy to get bogged down by bear markets. As mentioned in the previous point, investment is a long-term endeavour. Simply because your plan is not doing very well at the moment does not mean it will not be successful in the long run. Most investment plans have substantial long-term yields. Don’t pull out of the game because you have had a bad day, week, month, or even year. Stay committed and see your original plan through! 7. Recognize your investment type No two investors are the same in outlook. Every investor has preferences that would be different from that of another investor. For instance, while a certain investor might be drawn to riskier assets in their portfolio, another might be a lot more risk-averse. It is important to recognize what type of investor recognizes your tendencies and habits. If you are generally drawn to more risk, you might choose to be more careful next time the market is not doing too well. Similarly, if you are risk averse, you might want to consider expanding the size of your investment plan beyond your comfort zone during a bull market. 8. Learn from your successes and failures Investment plans do not attain fruition overnight. They require persistence and dedication. It is important to find ways to reflect on your decisions and learn from them. You could do this by sharing your investments with friends and family members that you trust. Or, if you are anything like me, you might choose to maintain a journal where to jot down what you have learned. The idea is not to get carried away by your successes, and to not make the same mistakes twice. It is highly unlikely that your investment plan will go exactly the way you intend it to. The best you can do is constantly re-evaluate and adapt. 8. Keep regular track of your investments Especially if you have a broker, it can be easy to disengage from your investments and not check on how they are doing. The important thing to remember is that your investment plan is ultimately yours. While the broker might be able to make certain choices for you, they cannot be the best judge of your preferences and aims. Set up a time every week, or month, that you dedicate towards re-evaluating your investment plan. Even ten to fifteen minutes every week, where you simply go through your portfolio’s performance, can go a long way in making informed choices. [B-02] Conclusion This article discusses various strategies that can be useful in improving the quality of your investment plan. While each strategy has its own merits, it is important to be selective when approaching your plan. Do not plan to implement all that is mentioned in a single day. Prioritizing what strategies work for you is important. Over time, you may be able to employ all of the strategies in a manner that is helpful and sustainable for your investment plan. It is also important to continue researching by reading other blogs. The Piramal website provides various articles that might directly or indirectly inform your investment choices. Be sure to browse through the website and find the information that will make your investment dreams come true!

08-11-2023

How do Fixed Deposits Work?

For us, making investments in fixed deposits has been an essential component. There is extremely little risk involved because assured returns are promised. What is a fixed deposit? In simple terms, a fixed deposit is an account that you open with a bank and put funds into. The funds are kept in the account for a certain amount of time and you get an assured rate of interest for doing so. With fixed deposits, interest is the last thing to be paid out. Both the duration of a fixed deposit and the interest rate is fixed, so you can easily figure out how much interest you will earn at the end. [B-01] How do fixed deposits work? When a customer opens a fixed deposit account, one of the things the investor can choose is the “tenure” (or “term”) of the fixed deposit. When you choose a term, you promise not to take any money out of your account for a certain amount of time, like a month, three months, six months, a year, etc. The length of a contract can be anywhere from one month to five years. Each tenure comes with a fixed interest rate. Every bank has already set fixed interest rates for deposits and the length of time they are held. How is interest calculated on the fixed deposit? How much money can be made from fixed deposits depends on three main things: the amount of money put in, the interest rate, and the length of time the money is invested. The basic formula for figuring out the interest on your FD is as follows: Interest on FD = Amount Invested x Interest Rate x (Duration/ 12 months) Also, if the tenure is higher then the interest rate will also be higher. For example, a 7-day fixed deposit will have a lower interest rate compared to one year fixed deposit. What are the types of fixed deposits? Standard Fixed DepositThis type of fixed deposit is by far the most common. You can open a regular fixed deposit with your savings account at almost any bank or NBFC in the world. The bank gives a fixed interest rate depending on the tenure that you have chosen. Depending on the bank you choose, this deposit could be held for anywhere from seven days to ten years. Corporate Fixed DepositMost of the time, private companies or NBFCs make a corporate fixed deposit. Since this is a corporate fixed deposit, the interest rates are usually higher than those offered by banks. Check the credit rating of the company to make sure your money is safe. Cumulative Fixed DepositA cumulative account is a lot like a regular fixed deposit in that you have to invest your money over a certain amount of time. When you make a cumulative fixed deposit, you won’t be able to get money back at regular intervals. Instead, you’ll get your money back when the deposit matures. This type of fixed deposit is appropriate for individuals who want to reach long-term investment goals. Non-Cumulative Fixed DepositThis plan is great for people who have monthly bills or expenses, like rent or EMIs (Equated Monthly Investments). The rate at which you earn interest on your investment is determined by how often you choose to receive interest payments. Senior Citizen Fixed DepositTo qualify for this deposit, you need to be at least 60 years old. Long-term fixed deposits, which offer an interest rate premium of 0.50% over the standard rate, are especially useful for retirees, who stand to profit from the higher rate. Tax Saving Fixed DepositsThis deposit, which may be made at nearly any bank, enables you to reduce the amount of money that you owe in taxes. There is a tax exemption given each year in the amount of Rs 1.5 lakh. There is a lock-in period of five years, during which you are unable to make any withdrawals from the account. What are the benefits of a fixed deposit? The benefits of fixed deposits are as follows: The money can be invested without risk. The interest rate on a fixed deposit is guaranteed to remain constant throughout time. Fixed deposit yields are immune to market volatility. You have the option of receiving interest on a monthly or quarterly basis, or in a lump sum upon maturity if you choose the cumulative method. For senior citizens, banks offer a 0.5% higher interest rate. What are the features of fixed deposits? Here are the features of fixed deposit: Assured ReturnsYou are ensured to receive a guaranteed return once you invest in a fixed deposit as the interest rates don’t influence market fluctuations hence keeping the deposit safe. Interest RatesYou can get more interest on your money if you invest it in an FD instead of just putting it in a regular savings account. Most of the time, the interest rates on corporate FDs are higher than those offered by traditional banks. Flexible TenureThe owner of a fixed deposit account is the only one who can decide how long a deposit will be held. Depending on the bank or other financial organisation, the minimum amount of time you have to invest in an FD can be anywhere from seven days to ten years. Tax PerksIf you commit to a tax-saving FD for five years, you may be able to reduce or get rid of your tax burden. Section 80C of the Income Tax Act of 1961 says that you can take up to Rs 1.5 lakhs out of your fixed deposit. You won’t be able to get the money in a tax-deferred FD for as long as the investment is in place. [B-02] Conclusion If you want to invest but can’t bring yourself to take risks with your money, a fixed deposit is a great option to look into. You get assured returns on fixed deposits and there are no risks involved. When in doubt, it may be worthwhile to seek the advice of an organisation such as Piramal Finance. You can learn about the interest rates at Piramal Finance, and as a result, analyse the aspects that go into making FD investments.

08-11-2023

Home Loan

How to Avail Home Loan Subsidy under Pradhan Mantri Awas Yojana

The government of India started Pradhan Mantri Awas Yojana in June 2015 to give Indian city dwellers a “Home for All” by the end of 2022. The government has given Rs. 2,000,000,000 to help with this. The PMAY goal is divided into four main parts: Rehabilitating existing slum dwellers with the help of the private sector Enhancing and developing houses of legatees Promoting low-cost housing for weaker sections with the help of a credit-linked subsidy Low-cost housing built by the government and the private sector together [B-01] How to Get a Home Loan Subsidy under the Pradhan Mantri Awas Yojana? To get a subsidy on your home loan through the PMAY programme, you must do one of the following: Find out if you are eligible for a PMAY mortgage subsidy before you apply (EWS, MIG, or LIG). How much carpet you can get through the PMAY programme depends on how much money you make. You can use an online PMAY Subsidy Calculator to determine how much you can make on your mortgage. The online application for the Pradhan Mantri Awas Yojana is made. The PMAY form can be filled out and sent online and in person. Even though sending in a paper form takes a lot of work, you can send in an online payment form by following the steps below: PMAY-HFA (Urban) is the main page of the PMAY website (pmaymis.gov.in) Choose “Citizen Assessment” and the area where you want to apply for the programme. Please enter your Aadhaar card information to link it to your profile (this is mandatory) You’ll be taken to a form where you’ll have to give more personal information. Click “Save” to save your PMAY form for later use. Choose the subsidy option for a home loan when you fill out your loan application. After filling out the PMAY form, the user must contact a bank or NBFC (offline or online). Along with the PMAY form, the lender must submit other documents, such as proof of income, information about assets, information about the land, information about co-applicants, etc. PMAY’s Core Components The Pradhan Mantri Home Loan Subsidy Scheme is made up of the following key parts: The interest rate on home loans will go down to 6.5% APR for terms of up to 15 years. People with old or disabilities will get homes on the ground floor. In the third step of the plan’s three-step process, 4041 municipal municipalities will be set up. PMAY Financial Aid The main goal of the PMAY Scheme is to help the least developed parts of India as much as possible while also making them stronger and better. PMAY gives the following grants to help with this: Every PMAY member gets a stipend from the government, which is often more than Rs. 100,000. Each PMAY member would get a central relief payment of Rs 150,000. This would increase the number of homes available. LIG and EWS get a 50% subsidy through CLSS, which stands for Credit-linked Subsidy Scheme. The poor people in cities will get Rs. 150,000 to fix up their homes and build new ones. Qualifications for the PMAY Mortgage loans are the only loan to get help from the PMAY CLSS subsidy. Under this program, the most you can borrow is INR 6 Lakhs. The most the customer can get is INR 2.67 lakh in subsidies. Most recipient households have two single children, a wife, and a husband. Even though the adult wage earner is not married, the family could still be called a typical MIG household. Nowhere in India should a house that is welcoming have a pucca house. Since the married couple owns the pucca home together, they will only be eligible for one PMAY subsidy. The PMAY program’s benefits can only be used by families who have never gotten help from a government-run housing programme. Borrowers who have used balance transfer options in the past for their mortgage loans can’t get the incentive. Families who want PMAY funds for MIG projects must give their Aadhaar numbers. How do I get the Benefits of the Pradhan Mantri Awas Yojana? To make sure that people can use the product it’s meant for. The process of the application was made easy. It’s not too hard to fill out an application. Submit your application for a home loan at a bank or non-bank financial institution (NBFC) that offers the subsidy and meets your needs best. Go to the PMAY website to get the application for the subsidy programme. Print the file and fill in all the important fields. Give the completed application and any other paperwork that is needed to a nearby business that will take it. If eligible, your request will be sent to CNA. If CNA approves your application, you will get a subsidy using the money you received from the lender. The money from the subsidy will be sent to your mortgage account to lower the total amount you owe. When a woman is the only one in the family who brings in money, she will get her way. The government also gives people who are old or have disabilities more help. Institutions in India, such as housing boards, development agencies, and urban municipal governments, are helping with this project. “Home for All” is another name for the PMAY programme. [B-02] Conclusion The Union Cabinet has extended the Pradhan Mantri Awas Yojana-Urban (PMAY-U) programme until December 31, 2024, except for the Credit-Linked Subsidy Scheme (CLSS). For MIG I and II under PMAY U, the CLSS vertical was good until March 31, 2021. For LIG/EWS, it was good until March 31, 2022. During this long time, no new homes will be allowed to be built. Visit the website for Piramal Finance to learn more about the PMAY or Pradhan Mantri Awas Yojana.

08-11-2023

Business Loan

How Can You Get Secured Business Loans Quickly In India?

If you are planning a new business venture or are already a business owner, you may find yourself in a situation in which you need access to finances. This could include capital to start a business or finances to help your business grow, especially in an unexpected financial crisis. Regardless of the situation, you need to be prepared for unforeseen circumstances. Being prepared with enough finances helps your business to survive, grow and compete effectively. There are usually two ways to get access to finances for your business. You can generate internal funds or look for business loans from external sources such as banks and financial institutions. Since internal funding is not ideal for long-term projects, external funding is considered the best option. A secured business loan is also known as collateralized credit and this type of loan requires a commercial or residential property, a piece of land or a movable object as collateral. The value of the mortgaged asset becomes the deciding factor of a secured business loan. [B-01] What Is a Secured Business Loan? Before learning how to get a secured business loan quickly, it is important to understand all the aspects of this type of business loan. This type of business loan is a scheme that financial institutions provide over tangible assets. Since lenders offer good interest rates for this type of business loan, it is cost-effective, less risky, highly secure and has a longer repayment tenure. Types of Secured Business Loans There are two types of secured business loans: Secured by Collateral: This type of business loan is taken against security in the form of property (owned by the business), vehicles, equipment and more as collateral. Secured by Personal Guarantee: This type of business loan is taken against assets that are owned by the individual, not the business. Features Of Secured Business Loans These are the multiple features of secured business loans: You can use a secured business loan for many purposes including business expansion, purchasing office space or land, enhancing inventory, consolidating debt and more. Secured business loans provide a low rate of interest compared to unsecured loans. Secured business loans may also provide tax benefits, in some cases. Depending on your business need and repayment capacity, you can apply for a secured business loan for a large sum of money. Debt repayment for secured business loans is longer than for unsecured business loans. How To Get a Secured Business Loan Quickly in India You can get a secured business loan in India effortlessly. However, you need to consider some factors to ensure the process is smooth and quick, including: Business Plan A business plan plays a very crucial role in getting a business loan quickly. A business plan is where you state your business goals, the purpose of the loan and its uses to help the lender analyse your need for a loan. Eligibility After the business plan has been prepared, it is essential to check if you are eligible to apply for a secured business loan. The eligibility criteria for secured business loans include: Businesses with limited liability, proprietorship companies and partnership companies. An excellent credit score and a good payback history. Between 21 and 70 years of age. All documents that are related to show adequate cash flow. All documents that are related to the assets being offered as security. Loan Amount Every secured business loan you take acts as a liability to your business. Therefore, opting for an appropriate business loan amount saves you from unnecessary financial burdens and chances of default. Value of Collateral Before applying for a secured business loan, be sure to check the value of the collateral with the lender. Lenders usually approve a secured business loan that is 70-80% of the collateral’s value. Moreover, although loans are offered based on cash flow, debt metrics and your requirements, the market valuation of the security plays a crucial role. Lenders usually grant loans on the loan-to-value ratio and the loan differs based on the property you are pledging for. It is highest for residential house properties and lowest for commercial properties and manufacturing units. Repayment Capacity You have to repay the loan amount borrowed plus the interest charged on the amount. When you negotiate the loan with the lender, ensure that you include a clause on partial or full prepayment of loans. You can use additional cash flow from higher sales to repay the loan, which will mitigate both debt and interest costs for the business. Documents Required For Secured Business Loans Lenders usually look for a clear and marketable title to the security offered for the business loan. They make sure that you are eligible to offer the property for mortgage. So, once you are eligible to get a secured business loan, you need to prepare the financial and personal information documents which should include: IT returns of the last two years (with competition) or CA-audited financials Form 16 KYC documents (such as an Aadhaar card, voter’s ID, passport, etc.) Last six months’ bank statements Documentation concerning the property offered as collateral which should include: Co-applications like spouses or blood relatives Co-owners of the property Names of partners, directors or shareholders Once you have prepared your documentation, you can apply either online or in person in just a few easy steps with your bank or other financial institution who you will be borrowing the loan amount from. Once your documents are verified, the loan amount will be sent to your bank account. [B-02] Conclusion A secured business loan against assets like property or even fixed deposits can help you acquire a low rate of interest, secure a high loan amount and build a good credit score. These loans also help you quickly when you are in financial need for your business. Based on your assets, you may consider applying for secured business loans with collateral or a personal guarantee. To find out more information about how to apply for secured business loans, visit Piramal Finance and read more informative articles on finances for your business.

08-11-2023

Other

How Does The EMI Break Up Into Principal And Interest?

Do you know the interest and principal of your home loan‘s EMI principal and interest breakup? Do you know how each EMI is split between paying off the principal value and interest? It is essential to know how your EMI breakup calculator is set up. This helps you decide whether or not to repay your loan early, which loan term to choose, along with other things. In this blog, you will learn how your loan principal and interest amount can be calculated from your EMI. You will also learn the different methods of using an EMI calculator. [B-01] Home Loan EMI Calculator When you pay your EMIs, some of it goes towards interest, and the rest goes toward paying off the loan. Each month, you pay down your loan a little bit, and your home loan principal and interest breakup reduces subsequently. You can use the EMI breakup calculator to find the amount due each month. The interest on the loan payment will be higher than the principal part, and the rate at which it decreases will also be lower. Using an EMI breakup calculator is the best way to calculate your monthly loan payments. Let us learn how. How Is EMI Calculated? The principal amount along with the interest rate change with time. The amount of interest is higher in the beginning and gets smaller as time goes on. The EMI breakup calculator is figured out by looking at interest rates, the loan amount, and how long it will take to pay off. Prepayment Of A Loan With A Long Term Many people choose loans with terms of 15 to 20 years. This is because they think that their salaries will go up in the next 4 to 6 years, allowing them to pay off the loan early. In such cases, they pay most of the interest on the loan for the initial few years and not much of the principal. For example, if you take out a loan for Rs. 30 lakhs for 20 years at 10% p.a. and pay it off in 5 years, you will still owe Rs. 27 lakhs, even though you’ve already paid Rs. 17 lakhs in EMIs. The prepayment penalty would be charged on top of that. So, if you take out a long-term loan with the idea that you’ll pay it off quickly, you should think again. This makes sense once your house’s value has gone up and you can earn a good profit. If you take out short-term loans, because they are for a shorter amount of time, a bigger part of your home loan EMI principal and interest breakup. This means you can plan to pay off the loan early if you want to. Using A Calculator To Compute The Loan Interest And Principal Here is how to compute your home loan principal and interest breakup manually. All you need is a pen, paper, and a calculator. Use this formula to figure out your EMI: EMI = P x [R x (1+R)^n]/[{(1+R)^n}-1] Where: P = Principal loan amount R = Periodic interest rate n = Number of months for making payments Once you have calculated the EMI, you can use the following formula to calculate the principal with interest for a given month: Interest component = P x R Using Excel To Calculate The Principal From The EMI Use Excel or Google Sheets and type the following formula to find the amount of principal and interest from your monthly EMI: To calculate the principal for a certain month= PPMT (I,x,n,-p). To calculate the interest type =IPMT (I,x,n,-p). You can also figure out your EMI by= PMT (I,n,-p) (I,n,-p) Where, I= the interest rate each month. x= month number e.g., the 1st month, the 10th month, etc. n= the length of the loan in months. p= the amount you owe. Here is an example to help you understand this concept better. Let’s assume the principal is Rs. 10 lakhs. If your annual interest rate is 12% p.a., the monthly rate is 1%. If the loan will be paid back in 20 years, or 240 months, the EMI will be: =PMT(0.01,240,-1000000), which is Rs. 11,011. The principal amount for the 10th month is =PPMT(0.01, 10, 240, -1000000), which comes to Rs. 1106. The interest amount will be=IPMT(0.01, 10, 240, -1000000), which is Rs. 9905. [B-02] Summing Up By now, you should have a good idea of what loan amortisation is and how home loan EMI principal and interest breakup work. Using an EMI breakup calculator is the best choice to calculate the amount. In this article, it was assumed that the loan was on a “Monthly Reducing Balance.” It is very important to know how your monthly payment is split between paying interest and the loan’s principal value. The points discussed in the article may help you. Choose your decision wisely. There are two ways for calculating your home loan EMI principal and interest payment. You can either use a manual EMI breakup calculator or Excel and keep track of your payments. To learn more about the EMI calculator, visit Piramal Finance and read similar blogs.

08-11-2023

Stocks Markets

How Does The Share Market Work In India?

When a person hears the words ‘stock market‘, their mind may picture Wall Street in New York. However, the stock market is not confined to one particular location. It is a global phenomenon that has consequences for investors everywhere. India’s stock market is the world’s largest and most liquid stock exchange. The stock market is divided into two segments: capital markets and secondary markets. Capital markets are for listing new stocks, while secondary markets are for trading existing stocks. This article will briefly explain how the Indian stock exchange operates. To help you make a well-informed choice, this article will also cover some potential pitfalls of buying stock. [B-01] What are Trading Stocks? The stock market is a major financial hub. It facilitates the buying and selling of a company’s shares at a predetermined price. To own a portion of a firm is to invest in its shares. Investors put money into a corporation when they purchase shares and withdraw it when they sell shares. The stock market capitalisation of a firm is its overall worth, as measured by the value of all its outstanding shares. Share prices rise and fall according to the demand for and supply of the asset being traded. When there is high demand for a certain stock, its price rises. An increase in a stock’s price is expected if demand exceeds supply. If more shares are available than buyers, the price will go down. Stock Market Pricing The band system is a predetermined pricing structure for the share market in India and is the method by which stock prices are determined. The same normally works according to supply and demand. Investors acquire stock in a firm hoping to make money on the fluctuations in the stock price. A stock’s price rises when demand increases for it. Conversely, when supply exceeds demand, prices drop. To better comprehend the stock market‘s pricing mechanism, consider the following: In the simplest terms, the share market is where companies sell shares to the public. This allows people to invest in these companies and get a piece of their future profit potential. The share price reflects how much the company is worth on the open market and will vary depending on supply and demand. A high demand for shares means that investors are eager to buy them, and a low demand means fewer buyers, which could lead to a lower price. Shares can also be traded on platforms like the Bombay Stock Exchange (BSE) or the National Stock Exchange of India Limited (NSE), allowing investors to buy and sell shares quickly and easily without going through an intermediary such as a broker or dealer. Finally, it is important to remember that no two markets are ever identical, so what works in one country may not work in another. It is therefore important to research your specific investment before making any decisions. Indian Stock Market Investment Steps To get you started on investment, here are 5 steps: Step 1: Analyze your investment objectives carefully. You must ensure that the stock you are considering investing in will serve your long-term financial goals. Step 2: Consider your risk tolerance. It is important to understand how much risk you are willing to take when investing in the Indian stock market. With so many potential scams and risky investments on the market, it is important to do your research before deciding. Step 3: Obtain professional advice. It is always a good idea to consult an independent financial advisor before making investment decisions. They can help and guide you through the entire process and ensure you get the most out of your money. Step 4: Look for quality stocks. When investing in the Indian stock market, make sure you are selecting quality companies that have strong fundamentals. Look for companies with positive earnings growth, low debt levels and a healthy balance sheet. Step 5: Stay disciplined. One of an investor’s biggest mistakes when investing in the Indian stock market is being too aggressive too quickly. Taking on too much risk can quickly result in losses, so it is important to stick to a gradual investment strategy if possible. Types of Indian Stockbrokers There are several types of stockbrokers in India: Full-service brokers offer comprehensive services such as margin trading, day trading, foreign exchange services and mutual fund investments. NBFC-based brokers are essentially platforms that connect investors with participating NBFCs. They offer lower costs than full-service brokers but lack support for margin trading and other advanced services. Online brokerages are a recent development in the Indian markets and offer a simplified investing experience compared to traditional brokerages. Key Concepts Here are 4 important concepts you need to know about the share market in India: Stock: A stock is an ownership interest in a company or enterprise. It may be traded on a stock market which is a marketplace where stocks and other securities are bought and sold. The value of a stock depends on the company’s financial condition, its prospects and the actions of its shareholders (owners of the stock). Shareholders: A shareholder is an individual or organisation with an ownership interest in a company. A shareholder may hold shares directly or through one or more beneficial owners. Shareholders have two primary goals: to maximise their return on investment (ROI) and to protect their rights. Investment: Investment is the purchase of equity in a company, which may bear risks such as loss of money if the company fails. The purpose of investment is to generate capital gains or losses over time, which can be used to increase one’s wealth and/or pay taxes. Financial statements: Financial statements show whether a company is healthy and solvent by revealing its assets, liabilities, expenses, profits and cash flow. Financial statements also provide information about how much money shareholders have left after paying taxes, dividends and other payments to holders of common stock (the main class of shares), which helps gauge overall investor sentiment about the company. [B-02] Conclusion Understanding how the share market in India works can be challenging at first, but understanding will be easy with little effort. The share market works in India as it does in other countries, i.e., the investor buys and sells shares of a company through the exchange, which creates liquidity for the stocks. This liquidity then drives the prices up and down. To read more information on trading in India’s stock markets, you can read more helpful articles like this one by visiting Piramal Finance and receiving guidance on getting started on your investments.

08-11-2023

Tax

How Much Tax is Paid on Bond Investment?

Taxable bonds are great investments. They’re relatively low-risk, provide income in the form of interest, and offer a guaranteed return when you purchase them. But what happens if you sell the bond before it matures? When deciding how much of their portfolio to invest in bonds, traders consider several things, including coupon payments, lock-in periods, etc. However, tax on bonds is the single most crucial consideration when buying these financial instruments. Before making a bond investment, it’s important to understand the potential benefits and tax implications, as these factors vary depending on the bond’s composition and the length of time it will be held. [B-01] Taxation of Bonds There are two methods for bondholders to profit from their investments: interest and appreciation in value. Unless otherwise stated, bond interest is usually taxed. If a bond were tax-exempt or eligible for capital gains exclusion, its name would reflect that. Taxable Bond Taxable bonds are debt securities whose yield to the investor is taxed at either the state or federal level. When deciding between a taxable bond and a tax-exempt bond, investors should consider their after-tax income. The interest charged on a corporate bond is taxable, as are any capital gains or losses realized from selling the bond early, and any original issue discount received is also taxable. A corporate bond’s overall tax liability is the sum of its constituent parts’ individual tax liabilities. Interest: Income earned from a company bond is taxable at federal and state levels. Generally speaking, this tax rate applies to a typical corporate bond. Capital Gains: Capital gains taxes are less common than interest taxes since an investor can only realize capital gains on a corporate bond by selling the bond before maturity. Until the bond reaches maturity, any gain from selling it is considered capital gain and must be taxed at the investor’s regular income tax rate. Issue Discount: It is not uncommon for bonds to be issued at a price well below their face value. The tax liability associated with the original issue discount resulting from the purchase of a zero coupon bond is the amount by which the offer price exceeds the bond’s par value. Regular Taxable Bonds The word “tax” in these bonds should give you a clue about their status. These bonds offer the opportunity for both capital gains and interest. When an investment matures, the investor reaps capital gains. Capital gains are the profit made from selling an asset, such as a bond, over and above the initial investment. Any profit from selling these bonds can be classified as either long-term or short-term. If you hold listed bonds for longer than a year, you will receive LTCG on your realized returns. Investors who sell bonds after holding them for less than a year pocket short-term capital gains. Both short-term and long-term capital gains are subject to taxation; however, the former is taxed at 10 per cent without indexation. Any profits made from the sale of unlisted bonds after a holding period of more than three years are considered long-term capital gains. With no adjustments for inflation, the tax rate is 20%. Gains from investments held for less than 36 months are subject to taxation as short-term capital gains at the individual’s marginal tax rate. Tax-Free Bonds These bonds are issued by governments and public-sector organizations (PSUs) to fund many important initiatives. Highways, trains, ports, urban and rural development, etc., are all funded thanks to tax-free bonds issued by the government. The interest earned on these investments is tax-free for the investor. However, depending on how long you keep onto the bonds before they mature or are sold. The income you receive from them will be treated as either a long-term capital gain or a short-term capital loss. Features Of Tax-Free Bonds These bonds accrue interest once yearly at a rate set by the federal government. None of the interest you earn will be subject to taxes. Government bonds that don’t incur taxes are typically purchased for a very long time horizon. You can choose a bond maturity of 10, 15, or 20 years according to your preferences. These bonds are highly liquid, meaning they can be bought and sold at any moment at the current market price. However, under the IT Act, you will be required to pay taxes on any gain from selling these bonds. Bonds can be held either physically or digitally. You can make a direct transaction or use your Demat account to purchase. Tax-Saving Bonds The government’s tax-saving bond program is a fantastic resource for those looking to set money aside for future tax obligations. The Income Tax Act recognizes them as unique papers that may be used to reduce a taxpayer’s taxable income. This bond is subject to a 5-year lock-in requirement. Anyone who owns a piece of real estate, a building, or another long-term capital asset can invest in these bonds and reduce their taxable income. The money they get from selling these things can be put into 54EC bonds. An investor in these bonds will pay no long-term capital gains tax. However, the 6-month waiting period between the sale and the investment is non-negotiable if you want to take advantage of this tax benefit. There is the potential for capital gains for investors. Long-term capital gains are taxed differently than short-term ones. The government also provides annual deductions for investments of up to Rs. 20,000. This amount exceeds the Rs. 1.5 lakh limit u/s 80C allows for tax savings. NHAI, REC, and PFC can issue 54EC bonds. Zero-Coupon Bonds When you purchase a bond, you will get regular interest payments or coupons at regular intervals. When issued, zero-coupon bonds are typically sold at a steep discount because of their lack of interest payments. When the investment matures, the investor will receive the full face value. [B-02] Conclusion Bonds are a safer investment option because of their consistent and predictable yields. Before jumping in, investors should research how different bonds are taxed and how the laws might change. We hope you have an improved grasp of RBI Taxable Bonds techniques for your financial goals. The article has provided a detailed preview of how various taxable bonds are taxed. Read more at Piramal.

08-11-2023

Personal Loan

Easy Tips to Choose The Right Personal Loan Tenure

Are you having trouble paying your bills and needing access to funds immediately to get out of a financial crisis? Plan to ask a family member for a favour? Don’t! To meet the need, you can opt for a personal loan, which will cost you the least amount of interest. But before you apply for a personal loan, you should know a few things, and personal loan tenure is one of them. Since interest is paid on the principal balance, the time it takes to pay back a personal loan is a key factor in figuring out the interest. It also affects your monthly payments. The shorter the personal loan tenure, the higher the monthly payments, and vice versa. Read on to learn how to wisely choose a personal loan tenure to get the most out of it. Before going any further, let’s define personal loan tenure in simple terms. [B-01] Meaning of personal loan tenure For someone who has never taken out a personal loan before, it’s important to know how they work. One of the most important parts is the personal loan tenure. So, what is the personal loan tenure? It is when you must pay back the loan to the lender. EMIs are paid on a set date every month and are used to pay back the loan. A lender can give you a loan for a long or short time. But in the end, it is up to you to decide how long it will last. The shortest personal loan tenure is 6 months, and the longest is 60 months. Importance of the Correct Personal Loan Tenure Choosing the correct tenure saves you money. It makes your monthly instalment payments manageable and doesn’t strain your budget. Here are some of the other good things about it: It enables you to establish a favorable credit score. This makes getting good loan rates easier. Lenders may use this information to evaluate how well you repay debt. 6 easy steps to choose the correct personal loan tenure Monitor your monthly budget and spending. One of the most important things to consider when choosing a personal loan tenure is how much it will cost each month. All you have to do is write down what you spend each month and subtract that amount from what you earn each month. Now, look at how much money you will have left and how much you will need to save for future costs. The amount left over is what you’ll pay each month as your EMI. Choose an EMI that fits easily into your budget, and never take on more than you can handle. Understanding with examples Let’s assume Rekha wants to apply for a personal loan. She makes Rs. 40,000 a month. Her expenditures each month come to Rs. 20,000. So, after saving, the best monthly payment will be between Rs. 5,000 and Rs. 10,000. Pay attention to future possibilities. Whether you have a job or run your own business, there comes a time when you can get a raise or grow your business. So, if you expect your salary to go up shortly, you will have more room to pay the higher EMI amount. This way, you’ll not only pay off the debt faster, but you’ll also save a lot of money on interest costs. Understanding with examples Let’s extend the above example. Rebecca received a promotion of Rs. 10,000. Now, she earns Rs. 60,000 a month and still spends Rs. 28,000. Now, it won’t be hard for her to pay an EMI of up to Rs. 20,000. This will reduce the personal loan tenure to a certain number of months and lower the interest rate. Consider your current liabilities. When you have other financial obligations, taking those into account can also help you choose the right personal loan tenure. Most of the time, you must consider other loans, credit card payments, rent, school costs, and others. Make sure you pick a term that lets you meet all your obligations without too much trouble. Use spreadsheets and the right formulas to get a clear picture of what needs to be done. Loan Amount How long you have to repay a personal loan depends greatly on how much you want to borrow. If you want to borrow a small amount, like 2-3 times your monthly earnings, you should aim for a shorter personal loan tenure. This is because a longer term will cost you more in interest. Also, if you want to finance a large amount of money that is 6–8 times your earnings, you should choose a longer term. Choosing a short personal loan tenure puts pressure on your finances and could lead to a mistake, which is even riskier. Determine interest rates. Personal loan interest rates depend on your credit score, which also affects whether or not you can get a personal loan. Aside from your credit score, the time you choose to repay the loan also affects the interest rate. Most of the time, interest rates are lower for loans with shorter terms and higher for loans with longer terms. If you’re given a lower interest rate depending on your credit score, choose a shorter term to save on interest. If you have a low credit score, choose a longer term since a shorter personal loan tenure with more interest would hurt your budget. By choosing a longer term, you can also enhance your credit score, which will help you get loans in the future. Use an EMI calculator. If you still can’t decide on personal loan tenure, you can use an EMI calculator. A simple, free online calculator can help determine how long the loan will last and how much the EMI will be. Change the loan term and EMI formula to get the best monthly payment. With the help of a personal loan EMI calculator, you can figure out how much you will pay in interest and how much you will pay overall (interest plus principal). You can also combine different loan terms with the recommended loan amount to find the personal loan tenure that works best for you. [B-02] Wrapping Up Personal loans are the simplest type of loan. They are also easier to get approved for than other types of loans. But before deciding on a personal loan tenure, you should weigh the pros and cons of each. You must also read the loan terms carefully. No matter what repayment term you choose, stick to the due dates to avoid any extra trouble. If you want to know more about choosing the right personal loan tenure, visit Piramal Finance for more blogs like this.

08-11-2023