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GST

GST Benefits and List of Taxes Replaced by GST

Paying taxes to the government is every citizen’s duty. Because of taxation, the government can generate enough revenue to fund infrastructure, education, healthcare, scientific development, defence, and many welfare schemes. The taxes paid by the citizens come back to them in the form of better facilities. Out of all the taxes that the Government of India levies on its citizens, GST, or the Goods and Services Tax, is a crucial one. The government introduced GST on 1 July 2017, as a form of indirect tax on all types of goods and services. The tax replaced all other existing taxes levied by both the Central Government and the state governments. [B-01] What Is GST And Why Was It Implemented? As mentioned earlier, GST is a form of indirect tax that the government levies on all the goods and services sold for domestic purposes. The tax amount is added to the total price of the product or the service. Out of many GST benefits, the most crucial is that it makes Indian products competitive in both domestic and global markets. However, petroleum products, alcoholic beverages, and electricity are not taxed under GST; instead, they are taxed by individual state governments. GST is divided into five tax slabs: 0%, 5%, 12%, 18% and 28%. There are four types of GST collected by different governments: IGST for the integrated tax levied by both the centre and state collectively, CGST levied only by Central Government, SGST levied by state governments, and UTGST levied by the governments of the union territories. List of Taxes Replaced by GST In India, GST has replaced the following taxes: Central Excise Duty Central Sales Tax and Service Tax Additional duties of customs and excise Excise duty on textiles and textile industries Value Added Tax Central Sales Tax, Entry Tax, and Purchase Tax Surcharge and CESS Taxes on advertisements, lottery, etc. Features of GST Some of the features of GST are Applicable Only to the SupplyUnlike other types of taxes that apply to production units, GST only applies to the supply of goods and services. Based on LocationGST works as location-based consumption taxation, not as origin-based taxation. Multiple Tax RatesGST allows for a range of tax rates like 0%, 5%, 12%, 18%, and 28%. A fixed list dictates that each product is to be charged with a different tax rate according to the tax slab. GST Composition SchemeSmall businesses from certain states that have an annual turnover of ₹75 lacs or ₹1 cr are eligible to apply for the GST Composition Scheme. According to this scheme, the firms only pay 1% of their yearly turnover as GST. Input Tax Credit SystemThe Input Tax Credit System is also one of the most vital features of GST. It implies that if a manufacturer or a service provider has already paid the input tax, that amount can be subtracted from the total tax liability. Benefits of GST You can also a range of benefits of GST registration, like Common MarketOne of the main advantages of GST is that it creates a common market for all goods and services. It also boosts foreign investment and makes domestic markets more competitive. Easy to AdministerAnother GST benefit is that it helps the government to easily administer all the indirect taxes on goods and services. As GST is backed up with a huge, end-to-end IT system, it becomes easier for the government to keep an eye on all the taxes. Improved ComplianceGST promotes compliance as all the returns are filed, all the input credits are verified, and all registrations are made online. Since everything is carried out online, it helps in keeping the taxpayers accountable. Uniformity of TaxesEarlier, there used to be many indirect taxes like excise duties and VAT. But after the advent of GST, the tax rates on all goods and services have become uniform across the country, so the whole system works smoothly. Prevention of Tax CascadingSince GST replaces all types of indirect taxes on products and services, no hidden costs are charged to the customer. This prevents tax cascading in the country. High Levels of TransparencyAnother GST benefit is that there is no opacity in how the tax system functions. As a single, unified tax is charged uniformly on all goods and services, there is utmost transparency in the whole process. Increased Competition:Removal of transaction costs and all other types of unseen costs improves competitiveness in trade, commerce, and production. Earlier, the provision of inter-state check posts added additional taxes on all goods and services. Now, since everything is boiled down to a single system, the extra costs have decreased, hence promoting competitiveness. [B-02] Conclusion GST is a unified tax system levied on all goods and services and has replaced many forms of indirect taxes. It reduces cascading of taxes, increases the transparency of the system, brings uniformity in revenue generation, and promotes tax compliance. However, along with GST benefits, the tax system also has some downsides like loss of fiscal autonomy of the states, no cross utilisation of tax, loss of revenue for manufacturers, etc. But the advantages of GST far outweigh its benefits. If this article helped you and made you more curious about GST, tax planning, different tax saving schemes, mutual funds, loan systems, etc., you can visit Piramal Finance. With the financial products and services of Piramal Finance, you can find the answers to your fiscal problems.
08-11-2023
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Other

Features And Benefits Of Good Credit Score You Need To Know

A three-digit figure, known as a good credit score, is used to reflect your suitability to get a loan or credit card. Credit scores range from 300 to 900, with 900 being the max score. When you request a property against loan, the bank or NBFC will check your credit score. TransUnion CIBIL, one of the four credit bureaus in India, provides this score. This score is based on a number of factors. Read on to learn more. [B-01] When it comes to credit, what factors determine a person’s score? As TransUnion CIBIL, the chance of getting a loan rises as your credit score gets closer to 900. A good credit score is regarded as 750 or more in most situations. How to improve your credit score? Listed below are five strategies that might help you improve your credit score. Options for Raising Your Credit Score You may think of your good credit score as a number in your credit report. Your credit score is based on various factors, including your payment history, credit mix, credit utilisation ratio, length of credit history, and more. Keep a clean track record by making full and on-time EMI payments for all credit cards and loans. Your credit score will take a hit if you make payments late or don’t make them at all. Repaying a loan on time over a long time shows lenders that you can be trusted with your money, which improves your credit score. Keep your ratio of borrowed funds to available funds low. The “utilisation rate” of a credit limit refers to the amount of that credit limit that has been used. The fact that you rely so much on credit indicates financial issues. Keeping your credit utilisation at or below 30 per cent will help with a good credit score. It suggests that you are less reliant on credit, have a lower burden for your EMIs, and are more reliable. Conduct routine checks of your credit report Any issues that arise need to be brought to the notice of CIBIL. They will resolve them by using the most suitable option for resolving the issue. Hence, the rating assigned to your credit profile may improve. Don’t Contact Many Lenders at Once If you’re looking for any loan such as a property against loan, only contact one lender. If you contact many lenders together, it makes you look like a credit-hungry person. This increases the number of hard queries on your credit report, both of which harm your credit score. Increase in Credit Limit If you want to have a good credit score, ask your credit card company for a higher credit limit. If you keep spending the same, having a higher credit limit will help you have a lower credit utilisation ratio. Inquire about a credit line increase by calling the provider. You should only consolidate debt if necessary. Always try to settle your bills fully before applying for a loan. Paying off your debts can lower your overall debt, and make you eligible for more loans if you need them. Why is it beneficial to have a high credit rating? Paying off debts, such as property against loan and credit cards, on time is one of the best ways to raise your credit score. Here is a list of some of the benefits that you can get as a direct result of having a good credit score – All borrowing rates are quite low. Having a good credit score has this major benefit. Everyone desires to have a great credit score to access low-interest options. The burden of debt can be reduced and paid off much more quickly as a result. In the long run, savings can be achieved by reducing major debts. Opportunities to obtain financing and credit cards are enhanced. Each lender checks your credit history and score when you apply for a property against loan or credit card. This is a “hard inquiry,” which might lower your credit score. Rejection of your application may harm your credit rating. However, if your credit score is high, creditors have less of a reason to reject your credit application. Thus, increasing the chances that you will be approved. Credit Limit Increases When applying for a credit card or loan, your income and good credit score are the two most important factors. So, you may get a bigger loan or a greater credit card limit. By examining your credit history and income stability, lenders can decide to determine if you are a reliable borrower. You could still be able to get a loan or a credit card even if you have a low credit score, but the terms will not be favourable. Influence in negotiations is increased Property against loan approval with higher interest rates is more likely for those with lower credit scores. These loans may have extremely tough repayment terms. Your ability to negotiate a better deal on the interest rate will be weakened. However, you will have a greater chance of having loans and credit cards approved if your credit is in excellent standing. You will also be able to compare loan offers and bargain for lower interest rates from lenders. [B-02] Conclusion With time, your credit score may increase or remain the same. An established track record of responsible monetary behaviour is the only requirement to qualify for credit. If you do this, you will be able to build your credit history and reap the benefits of being a responsible borrower, such as lower interest rates, more favourable loan terms, and other benefits. Learn more about a good credit score through blogs and articles on Piramal Finance.
08-11-2023
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Other

Financial lessons to be learnt this Diwali

Diwali, a famous occasion known as the festival of lights, is being celebrated. It won’t be long now, and if you choose, you’ll be able to find presents that everyone on your list will like. How often should you prepare in advance and review your finances? That is, to ensure you can pay for any unforeseen expenses. [B-01] Financial Planning Tips Please take advantage of the following financial planning tips to help create a strategy to improve your finances before Diwali. You must always prioritise safety You always take extra care to ensure the safety of your loved ones. Hence your financial lessons and well-being must be subject to the same care. You should confer with a qualified financial professional when investing money in schemes. There are a lot of approaches that first look like they may be successful, but in the end, they’re not. This also includes the things that are exchanged for money. You should never give in to the demands of a person pleading with you to buy stock. Do your research and preparation before investing any money in the stock market. Always be sure to keep a close check on your investments During the days before Diwali, every family spends time cleaning. It is planned to get rid of all the waste. Those who invest do so to get brand-new goods that may have some practical application. Use financial lessons with the same frame of reference. It is critical to have an efficient management strategy for your online investment portfolio. That is, you want to get rid of any unused assets. Instead, it would help if you focused on making plans to buy new assets. These assets are for the future that might come in handy. Because of its size, your investment portfolio demands complete and total honesty. In-advance planning and preparation The preparations for Diwali start months in advance. The holiday season is when everyone starts thinking about what they can do for their loved ones. From the treats, they will bake and the crackers they will burn, to the new clothes they will buy, and the improvements they will make to their homes. During this time, everyone’s thoughts turn to what they can do for their families and friends. In a similar spirit, it is possible to better returns. That is by initiating early planning and online investment. It is impossible to understand the power of compounding and early investment. Diwali requires you to take extra care to safeguard your valuables and belongings. A good financial lessons strategy should be in a place far before making any investments. Use the services of a qualified and experienced financial counsellor at any cost. Make a strategy for your investments, and then stick to it. During Diwali, friends and family exchange gifts to reflect each person’s unique preferences. As one goes through life, their priorities will shift. It will be reflected in their approach to financial lessons. If you have a strategy in place, it will be easier for you to ride out any hard patches. In the market without allowing your monthly investment income to be affected. Need for a Diverse Portfolio Diversifying one’s portfolio is analogous to how you select a variety of pyrotechnics to celebrate Diwali. Your happiness and success will be directly correlated to the diversity of your online investment portfolio. Additionally, you sort the crackers into safe and risky variants and then distribute the latter to the children in the group. When investing, you need to do the same thing: assess many different elements to determine whether strategies are riskier than others. Make a plan for unexpected events If many fireworks are going off, it’s important to have fire extinguishers in emergencies. When making financial commitments, it’s important to have enough insurance as a safety net against unanticipated events that may affect the investment‘s return. When unanticipated losses occur, insurance coverage will be beneficial. No one should ever invest in an unpopular scheme, just as we never purchase crackers from unknown producers. Before investing in any scheme, you must learn about the hazards. Keep up your independent study methods Discover something new daily. One way to earn the goddess’ favour is to study and let the oil of knowledge purify your soul. Financial lessons are a constant process, not one event. Organise your personal and financial spaces After a few months of regular decluttering, you will feel less nervous. People prepare for the arrival of the goddess of wealth. So people clean and organise their houses in the days leading up to Diwali. Given this, it’s clear you must get your finances in order. Reduce or do away with unnecessary papers. Investments that aren’t producing results and insurance policies that are of no use must be done away with. To treat your riches with dignity If a group of people appreciate the money goddess, she is likelier to stick around with them than if they don’t. Invest time and energy into managing your finances by making a sensible budget. Cut back on unnecessary expenses and plan your online investment where it can grow. Having a wide selection of options is beneficial. One should diversify assets to reap the benefits of various businesses. A diversified online investment portfolio has a wide range of assets to opt from. Each has its potential for profit and loss. The result is a more balanced and stable portfolio for the investor. [B-02] Conclusion Online Investment means spreading your money in multiple assets to make money. Please don’t put all your money in one place; instead, spread it around as much as possible. You can learn much about the benefit of stability in finances from the amazing blogs and articles on Piramal Finance. It’s time to plan so that your Diwali festivities are secure, fun, and lucrative.
08-11-2023
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Home Loan

Features & Benefits Of Piramal Finance Home Loan

You all might have a dream to own a house. However, it is very costly to construct your ideal home from scratch. A home loan could be a great way to fund your purchase. Let us find out how. [B-01] What Is A Home Loan? A home loan is borrowed from a financial institution to buy or build a house. Not everyone indeed has the cash to buy or construct a home at once, here is where banks and other lenders come to the rescue. They fill in the gap by funding in exchange for regular repayments, with interest. The most common sort of home loan offered by financial institutions is used only for residential purposes (such as buying a house or apartment, constructing a dwelling, etc.). Additional benefits that are available with this loan include longer loan terms, more adaptable repayment schedules, tax rebates, and so on. Advantages Of Obtaining A Home Loan Here are some benefits of obtaining a home loan: Tax benefits The ability to deduct interest and principal payments from your taxable income is the biggest perk of getting a house loan. Stamp duty payments up to Rs.1.5 lakh u/s 80C. Interest repayments up to Rs.2 lakh u/s 24B. Interest repayments up to Rs.2 lakh in specific situations u/s 80EE and 80EEA, and principal repayments up to Rs.1.5 lakh u/s 80C are all tax-deductible. Lower rate of interest The interest rate on a house loan is cheaper compared to other loan options. If you’re having trouble making ends meet, refinancing your house loan is a cheaper option than taking a personal loan. Property research due diligence In the case of a home purchase funded by a financial institution, the latter will perform extensive due diligence on the property from a legal point of view, including verifying the authenticity of any supporting papers. The chances of getting scammed will be minimal in this case. Thanks to the bank’s attentiveness on the matter. Assuming the bank is satisfied with the property, you and your home, both are protected. Long repayment tenure Mortgage loan repayment periods are quite lengthy, generally lasting between 25 and 30 years. This is because taking out a mortgage requires a significant amount of debt. Repaying the principal and interest over a longer period will lower the EMIs. No penalty for advance payment. With a floating rate of interest, you can make pre-payments anytime you have a large sum of money available, without incurring any penalties. This will allow you to pay off your house loan much before the end of the agreed-upon term. Balance transfer facility The home loan interest rate, fees, and satisfaction with customer service are just a few of the factors that might prompt a homeowner to switch mortgage lenders. Home Loan Interest Rates As of March 2021, the average interest rate on a house loan in India is 11%. Lender to lender, the repo rate set by the Reserve Bank of India (RBI), inflation, economic activity, and other variables also influence interest rates. When we talk about house loans, certain banks provide discounts to women, bank employees, and senior citizens. In addition, the home loan interest rate might be either fixed or variable. An adjustable-rate mortgage’s interest rate remains constant irrespective of market swings, whereas a floating-rate mortgage’s rate might change often. The borrower may or may not reap any benefits from this. Features Of Piramal Home Loan The following are some of Piramal Home Loans’ features: Low CIBIL Score To qualify for a loan from a bank or other financial institution, your CIBIL score needs to be 750 or above. However, if you meet the other requirements for a house loan with Piramal Finance, you may be eligible for a loan even with a CIBIL score as low as 650. Cash Salaried If you are salaried and want to apply for a mortgage, your pay slips will serve as proof of income. Employees who are paid in cash, such as housekeepers, drivers, etc., can apply to Piramal Housing without submitting a pay slip. This feature proves vital for people working in informal economic sectors. Self-employed Business owners, sole proprietors, and others in similar professions often have their house loan applications denied because their monthly income fluctuates often. These applications are reviewed and approved by Piramal, who works with entrepreneurs and freelancers to create unique repayment plans. Proprietorship firm employees Companies that are sole proprietorships are not required to register under the Companies Act or the Establishment Act. There are unincorporated businesses that offer paid services to clients both online and offline. Workers of proprietorship firms are also more likely than those of corporations to get their pay in cash, and not necessarily on the same day of the month. Moreover, to lend the customers, Piramal also loans to the staff of these companies. Extended Tenure Borrowers might get up to 30 years to pay back their loan from Piramal Finance. Repaying a debt over a longer period means the borrower may spread out the cost of repayment. This means lower EMIs. A convenient method of recording information The application process at Piramal Finance is easy for potential borrowers. Borrowers can apply for a house loan from Piramal Finance even if they don’t have pay slips proving their employment with the company for at least a year. Proven Methods When you apply for a loan with Piramal Finance. You will have access to a personal finance expert who can answer any questions you may have. They will also help anyone looking for a home loan, and find the best options for their unique needs. [B-02] The Bottom Line To learn more about home loans and the application process, read similar blogs on the Piramal Finance website.
08-11-2023
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Know More

Gold Vs Silver: Which Is Better for Investment?

Investment is the best way to increase the value of someone’s assets and their worth over time. Many conventional investment avenues, such as fixed deposits, mutual funds, stock market investments, etc., have helped people to gain higher interest. But, according to the latest trends, investing in metals has provided better returns. And when we say metals, we are talking about gold investments and silver investments. Both gold and silver investments yield handsome returns, and there has been a steady increase in their return rates. While gold is an expensive metal that is highly coveted, silver is widely used in various industries. Both investment options have their pros and cons, making it even more difficult to choose the ideal investment metal. [B-01] Things to Keep in Mind while Investing in Metals Here are some tips that you can consider while choosing between the two metals: DemandEvery metal investor must take into account this very crucial factor. The demand for the metal decides its worth and its potential interest rate. In the case of gold investment, it is a highly precious metal used more in creating jewellery. On the other hand, silver is widely used in industries like electronics, medicine, and thermal. LiquidityLiquidity in investment means how easy it is for you to trade these metals. For example, gold has higher liquidity, about 6 times more than silver. AffordabilityGold is more expensive, which makes silver more affordable. But since gold is more expensive than silver, gold has more reserve value and is also promoted more. Market VolatilityMany investors worry about market volatility, so they are unsure about gold investment or silver investment. If the market is more volatile, it is more prone to inconsistency. Silver, as a metal, is more volatile than gold, as it has higher demand. So, as the economic cycle changes, the demand for silver fluctuates. So, investing in it might become a bit risky. StorageStorage requirements of the metal also decide if the investment is worth it or not. If the metal takes up huge storage space then investing in it is not a good idea. Also, if the metal needs to be stored in a special condition to prevent oxidation then also the metal is not a decent investment option. Which is Better: Gold Investment and Silver Investment? There is no definite answer to this question as both of them have their own pros and cons. Let us compare silver and gold investments based on some parameters. Rate of ReturnSilver investment has a higher return rate than gold investment. In 2010, the return rate of silver was about 80-85%, whereas that of gold was about 20-25%. TradingWhen talking about the liquidity of the asset, gold has a market size of about ₹24.5 trillion, which makes it way more easily tradable than silver, whose market size is about ₹4.4 trillion. So, from a trading perspective, gold investment is a better option than silver investment. PricingGold is a highly sought-after metal, which makes it highly expensive in the Indian market. Due to the high imbalance in the demand and supply of gold, gold prices are higher than those of silver. Silver, on the other hand, has a higher demand and also caters to a large customer size. So, the price of silver is lower than that of gold, making it a better investment option than the latter. Storage FacilitiesSilver has more density, so gold takes lesser storage space than silver. Also, gold does not require special storage conditions. But silver requires a specialised storing facility as it gets easily oxidised when it comes in contact with air. Also, banks provide storage facilities for gold but not for silver. So, from the storage point of view, gold has an edge over silver. Risk FactorBecause of the differences in their values, the risk involved in gold investment is higher than in silver investment. Silver is a low-valued asset, which makes it a risk-free investment metal. Gold is a very highly valued asset, which adds extra risk for its investors. Market Rate FluctuationsAccording to market trends, silver has been more volatile than gold because of its changing demand as an industrial material. On the contrary, gold is less volatile, as its price stays stable most of the time. So, gold investment is a better option from the perspective of market volatility. [B-02] Conclusion Both silver investment and gold investment have their pros and cons. Which of the two you choose depends on your risk appetite. While silver has low risks and higher returns, gold has higher liquidity and less volatility. So, you should weigh all these factors before investing in either of these metals. Instead of buying these metals in the form of jewellery, bars, and coins, you can also invest in them in the form of sovereign gold bonds, silver and gold ETFs, etc. If you have come this far, it means you like reading about different investment schemes and policies. If that is the case, you should visit Piramal Finance to read more about ETF investments, mutual funds, stock market and trading, etc. Piramal Finance can also help you manage your finances with its financial products and services.
08-11-2023
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Business Loan

Expert Tips to Get Your Business Loan Approved

Are you planning to get a business loan shortly? Are you worried about the documents and processes involved? Don’t worry we’ve got your back! We all know how challenging it can become to a loan approved. Especially business loans. Any loan, be it business loans or housing loans. Banks approve loans only after a detailed and careful examination of documents and validity. Getting your instant business loan approved depends on lenders. But loan applicants can influence lenders with a careful and systematic approach. A few things are to be kept in mind while applying for a business loan. Anyone can need financial assistance for expanding a business. Hence, getting funds for your business is only possible with a loan. A business loan is the best way to fund your business. Let’s see how we can successfully apply for a business loan. Moreover, get the loan approved by the respective lenders. Let’s dive in to know more. [B-01] Here Are the Expert Tips to Get Your Business Loans Approved Make sure you have a good business credit score Whenever you apply for a loan, your lender checks your credit score. A business credit score is one of the most crucial factors in determining a business loan application. In simple words, credit score reflects a business’s repayment capability. However, if you have a good business credit score of 750 and above. It is most likely to be accepted by lenders and banks. A good credit score can help you get closer to your instant business loan getting approved. So it is recommended to have a good credit score. A credit score reflects one’s repayment worthiness. A good score can range from anywhere between 750 to 900 points. While a low score is anywhere below 750 points. Regular payments of loans and credit card bills on time improve the score over time. Have all the necessary documents required for a business loan in one place We all know that any kind of loan requires a lot of documentation. Before applying for a business loan, we recommend getting a hold of all necessary documents for the application. One of the most popular reasons for your loan getting rejected is the lack of sufficient documents. Documents like identity proof, business operational proof, GST filings, income tax returns filings records and Pan cards etc. are a few of the most important ones. Before applying read the business loan application form requirements. Then apply and submit the documents accordingly. Keep clear on the loan amount and reason for a business loan Since lenders and banks can quiz you on the loan application. It is recommended to keep things clear regarding the business loan. For instance, one should know the exact required loan amount. Being clear about the loan amount can save you from a confusing decision. And also help you plan your business’s financial goal successfully. Moreover, lenders can ask you for a concrete reason concerning your loan application. Make sure to be clear. Loans for business can be for many reasons. For example, purchasing equipment, expansion of the business, investing in other firms and so on. Therefore, you should know the exact reason for the business loan. Make sure the cash flow of your business is huge and stable Remember, lenders, do not only check your credit score. But they also check your business cash flow over the period. In any bank, while sanctioning a loan, repayment is one thing they consider the most. If your business has a good cash flow, your business loan is most likely to be sanctioned. Moreover, your business should also be stable. Keep your business bank account balance high. Banks check bank balances to determine the loan. If you fail on these points, the chance is that your business loan will never get approved. Review and identify the right loan lender You can find a lot of business loan lenders in India. Every lender has their interest rate and processing for a loan application. It is recommended to review and identify the right lender as per your business requirement. Low-interest rates and instant business loan dispersal are a few points to note. We recommend borrowers patiently study every lender business loan policy before going ahead with it. Thoroughly knowing your lender and its loan policies will help you ace your loan application successful. Never rush and keep patience A borrower should never rush into getting his loan approved. It will take time. And requires patience. Banks may take up to 3 weeks to approve your business loan application. If one has applied for an instant business loan, then it may take less time. Keep patience. Wait for the decision. If you feel it’s late, take updates from the lender from time to time. Keep other supporting documents ready. If asked, submit them immediately. [B-02] Conclusion It is very clear from the above points that a borrower needs to keep a lot of things in mind while applying for a business loan. Lenders do a detailed check and balance when releasing a loan amount. One of the most important factors for loan consideration is repayment capability. Make sure you have a good credit score. And your business is capable of repaying the loan taken. Therefore, it is advised not to rush into casually applying for a loan. Instead, read the form eligibility criteria and the documentation needed. This way, the chances of your business loan being approved become higher. Keep patience and wait for the lender’s decision. For more information on similar topics, you can visit the Piramal Finance website PersonalLoan (piramalfinance.com). You can also explore a host of financial products and services. Piramal is a one-stop solution for all your financial needs.
08-11-2023
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Stocks Markets

Gold vs Equity: Which is a Safer Investment Option?

Saving in the form of currency has become less profitable in recent times. People have started looking for better options to invest their earnings and multiply them. Out of the many options, investing in gold and buying shares in the stock market have been the most popular. These two options have provided higher rates of interest and various benefits to investors. Both of these investment schemes behave differently in the market and have a track record of beating inflation. Gold being a highly coveted metal performs better against steady inflation, whereas the stock market gives all-time great returns. But is there a better investment option between the two? [B-01] Gold vs Equity: How is One Different from the Other? Gold has been one of the leading forms of assets for millennia. It had always been a precious metal and was used as a replacement for currency. Till today, gold has not lost its value and investing in gold yields high returns. On the other hand, equity has done well for those traders and investors who used proper planning, studied market behaviour, and withstood volatility. As both gold and stocks behave differently in the market, it is crucial to know how one differs from the other in terms of investment. There are several factors which you must take into account before investing in gold or the stock market. LiquidityLiquidity means the ease with which an asset can be traded and turned into cash without affecting the market. Investing in gold might be rewarding, but its liquidity is poor as compared with stocks. Investing in the stock market is a plus point from the liquidity aspect, as stocks can be easily bought, sold, and converted into currency. Financial ProtectionIn turbulent times, there is high uncertainty in the investment sector. But investing in gold can be a wise move in those times because gold overcomes inflation in many cases. For instance, during the crisis period followed by COVID-19, gold overcame the inflationary trends and gave financial safety to its investors. Rate of ReturnInvesting in equity will give you a higher rate of return as compared with investing in gold. As per a report, the rate of long-term return from equity investment ranges from 14% to 16%. This rate is about 4.1% in gold. Falling PricesAs mentioned earlier, gold has a better edge than equity during tough times. Because of the pandemic, the price of gold has greatly increased. According to the research conducted by Multi Commodity Exchange of India Ltd., the price of gold increased by 7% during the first quarter of 2020, and the rate of return was about 11%. On the other hand, in the case of equity investment, the stock market crashed around 30-40% during the crisis. Mainly, the Indian stock market faced a depletion of about 25% as compared to the global figures of about 15%. Tax BenefitsIf you keep tax benefits in focus, investing in equity has many benefits as compared with investing in gold. Under Section 80(C) of the Indian Tax Act, 1961, various tax benefits can be obtained from equity investment. Risk FactorInvesting in gold bears fewer risks as compared with investing in equity, chiefly because of the volatility of the market. Gold is one of the safest asset classes and is the best option to invest in when the market is volatile. In terms of safety, gold has an edge over the stock market. Which One is Better for Investment: Gold or Equity? Both of these investments yield good results, given that you understand the nature of the market and the features of these options. You have to fully assess the pros and cons of both options and conduct proper planning to get the best returns. In terms of return rates and liquidity, the stock market gives better returns and has higher liquidity than gold. But investing in gold is better than stocks when it comes to risk factors and market volatility. If you understand inflation, market nature, liquidity, and the behaviour of different assets, it becomes easier for you to decide on a better investment option. [B-02] Conclusion Whether to invest in gold or equity depends on your risk appetite, investment goals, and needs. The stock market is better for getting higher returns, whereas investing in gold is a better option if you want to invest safely and during high uncertainty. It also helps expand your portfolio diversity. Instead of buying gold in the form of jewellery, you can prefer buying gold ETFs to avoid hassles like crafting charges, storage, safety, etc. There is another option that is highly opted for instead of gold and gold ETFs: Sovereign Gold Bonds. These provide an assured rate of interest upon investment. If you want to know more about SGBs and Gold ETFs, you can visit Piramal Finance. Not only this, but the website also provides you with various articles related to loans, taxes, investments, financing options, etc. You can also make sure to take advantage of their other financial products and services.
08-11-2023
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Gold Loan

What to Choose: Gold Loan With EMI or Overdraft Protection?

A secure personal loan, known as a gold loan, is intended to assist borrowers who require urgent access to funds. When your credit score is low, a gold loan can help you avoid financial problems. Among the many benefits of gold loans are their simple paperwork, basic eligibility, and quick disbursal. These loans come in various forms to suit your needs. Now the question arises, which option is best for choosing a gold loan? Here is a guide to help you decide between an overdraft or an EMI facility for repaying a gold loan. [B-01] What is a gold loan? The demand for gold has grown recently and will continue to grow. People value it as a store of value wherein the money invested can grow in future. They can also use the gold to raise money for various needs. When people want a little extra money to pay for events or a crisis, or tasks like education, home repairs, etc, a gold loan is useful. Herein you pledge your gold with a lender who will offer you option 80% of the value of the gold as a loan. Gold loan interest rate will be given by the lender at the time of disbursal. You will have the option to repay the loan in the form of EMI or use it as an overdraft. What Is the Facility of EMI On A Gold Loan? When it comes to the EMI option, it works more like a normal loan. This is usually a system where you get a gold loan and then repay the loan amount in EMIs over the loan tenure The month after loan disbursal will mark the start of repayments. In general, lenders offer loans to their customers around 80% of the value of their gold. Under this option, you receive a gold loan for a specified tenure and need to repay it in the form of EMIs as per the rules of the lender. the EMI will depend on the gold loan interest rate, loan amount, and tenure. What Is the Option of Gold Loan With an Overdraft? A gold loan repayment using an overdraft works like a credit card payment. You are permitted to use credit cards up to their issued credit limit. The same is true for a loan facility with an overdraft. You are not required to pay interest on the total amount but only on the amount used. However, it should be noted that the interest rates for this facility are higher than EMI option. Unlike a gold loan with an EMI, You only need to serve the interest during the loan tenure. You can also close the overdraft anytime by paying the balance amount. Difference Between The Two Options It can be challenging to choose between a gold loan with an overdraft and an EMI alternative. Both have the potential to be beneficial and harmful at the same time. Let us find out how: Choosing a gold loan in an overdraft works as a sort of credit card. It ensures you can get access to draw any amount up to the total loan amount as and when you need it. For those users who are not sure of the loan amount they may need, this flexibility can be quite helpful. As opposed to this, a loan facility on EMI makes the borrower receive the loan money all at once. You may choose to spend it all at once or in instalments. There is a lack of flexibility here and you must pay interest on the entire loan amount. If a customer uses the overdraft facility, they can lower the interest cost. When they withdraw smaller amounts than the total amount they only need to pay interest only on the amount used. But in the case of EMI, your EMI includes the interest for the entire loan amount. So even if the money is in your bank account, you will still have to pay the interest on it. People can choose the repayment duration and select an EMI amount that they can afford under the EMI option. This eases the burden of repayment, reducing financial stress. An excellent way of keeping track of all the expenses. In contrast, if you close a gold loan before the loan tenure, you might have to pay foreclosure fees. Compared to the EMI option, people who take up a gold loan with an overdraft are unsure of how much money they will spend each month. Therefore, the rate of interest that will be levied and the loan tenure is also unclear. What to finally choose? If you are in a situation where you need to access funds quickly, then you can get a gold loan. This is a good option when you do not want to borrow from friends and family. But how to choose a gold loan and repayment option? Depending on your needs and ease, you can decide between an EMI loan and an overdraft facility. However, since overdrafts of gold loans only charge interest on the amount used and permit borrowing up to the sanctioned amount, they are favourable as compared to EMIs [B-02] Summing up Depending on your needs, you can choose between a gold loan with EMI or an overdraft facility. They both have their pros and cons, hence you need to choose wisely. If you want to learn more about gold loans, visit Piramal Finance. They have many blogs and articles on this topic to help you make a decision. They also offer various personal loans to cater to your urgent needs for money.
08-11-2023
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Features Of Systematic Deposit Plan-Secured Returns & Flexible Tenure

An SDP will allow you to realise your money goals and provide peace of mind for your future. You may make money from a wide range of investments. Some may be riskier than others, but all of them provide you with the chance to grow your money. You may put this profit toward saving for retirement or other goals. You can also put it in a fund for when you need to meet some urgent costs. [B-01] Systematic Deposit Plan There are many similarities between the SDP, the RDs, and the FDs, three popular savings plans. When you buy an SDP, you lock in the interest rate and it won’t change no matter what happens in the market. A variable interest rate will be applied to each monthly deposit, which will be the only new aspect of SDPs. If you invested for a year, the amount of return you received each month would vary. Benefits of a Systematic Deposit Plan You can invest fixed-income assets at a time or can space them out over a period. It would help if you learn about how the current rate on FDs will impact the returns on any new FDs you may start. It is easy to start saving money without any pressure on your financial plan. An SDP financial institution requires a deposit of at least Rs 5,000 per month. Here are some benefits of SDP that you must know: Easy to Start You can save time, and effort, and get rid of stress with SDP. It helps you in breaking down the process of investing into smaller chunks and start with a few simple steps. Starting an SDP is much easier than going to the bank and waiting in a long line or filling out loads of paperwork. Better Stability Investors who take part in the SDP enjoy peace of mind as their money is safe from losses. CRISIL and ICRA have placed a high credit rating on SDP institutions due to their strong financials. Hence, the investments in question are risk-free. Assured rate of interest Investors in SDP can save money monthly and receive their returns all on the same day. There is no need to wait until a large sum of money has been collected. This allows you to maximise your earnings. Systematic Approach Investors can create a corpus for urgent needs with as little as Rs. 5,000 per month. You can make the initial payment using a bank cheque or a credit card. You can also make payments via NACH. The funds for such payments will be debited from your bank account on a given date. Flexible Investment The Single Maturity Scheme is suitable if you have a major need for money but can only set aside a small amount each month. You have the option of selecting terms from 12 to 60 months. You can contribute on the seventh and the twelfth of each month and the first, third, and fifth of each month. You will only need to choose a date once, which will be used for all the next payments. No Cheque Bounce Fees You are not subject to a penalty if you fail to make a monthly deposit. This feature is available when you participate in the SDP’s Single Maturity Scheme rather than the Monthly Maturity Scheme. The variant of the Single Maturity Scheme combines the benefits of SIPs and SDP to give the best of both worlds. This scheme is of great interest to young investors as it combines the best features. Investors can get to their goals with little capital outlay and have access to the benefits of FDs. The SDP is a way to save money that helps you progress from being an average investor to a remarkable one. When you learn some basic finance skills, then you can start exploring other options that can offer better returns. Organise your wealth into different buckets “Laddering” refers to starting many fixed deposits with varying maturities. There is a specific maturity date and withdrawal limit for each SDP. These may be put to use in a wide variety of situations and for a wide range of goals. You may have your sights set on a car in two years and a child’s college tuition in five. You may use a fixed deposit calculator to generate a general estimate of your monthly income. You may use this data to decide when and how much to contribute to each goal. Different Options Available A systematic Investment Plan (SIP) helps with careful investments. Your profits may go down or higher based on the market and other variables you can’t control. Fixed-income assets, such as an SDP, offer safety and security for your money. It ensures a steady flow of funds at a given rate of return. Regular deposits may be useful for saving money, although they offer low returns. The prospects for investment offered by financial companies are solid and provide secured rewards. [B-02] Conclusion A Systematic Deposit Plan (SDP) is the first of its type, a monthly savings initiative. The SDP is a market-first savings product that combines the greatest features of a fixed deposit with those of a systematic investment plan. You may start investing with as little as Rs. 5,000 per month if you utilise this saving strategy. If you want to learn more about multiple options where you can invest your money, you must visit Piramal Finance. They have a range of blogs and articles to help you improve your finance skills. If you need any advice, their experts can guide you.
08-11-2023
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