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Schemes

Features & Benefits of National Pension Scheme (NPS) Returns

To address the issue of retirement security in India, the Indian government has established the National Pension System (NPS). The National Pension System is a pension plan funded via employee contributions. The government has established this optional program to help you save for retirement. If you are living in India and are between 18 and 60 years old, you are eligible to join the NPS. Because this program is not tied to fluctuations in the market, profits are guaranteed even after the investment term has ended. The fund managers disperse the National Pension System‘s return. There are eight distinct pension fund managers a beneficiary may choose from. Their options change according to the asset classes, tier, and investment distribution. Returns under the National Pension System depend on your chosen asset allocation and PFM. [B-01] Who should invest in the NPS? The National Pension System is available to any resident of India who wants to start saving for retirement. When you change your job, the plan is maintained on your behalf. A National Pension System may be the best solution if you want to ensure steady income after your retirement. The biggest benefit of the NPS is that you do not have to take on the risk associated with investing in products like capital markets. Moreover, the NPS tax benefits of a systematic investment plan make the national pension system suitable for everybody. What are the features and benefits of the National Pension Scheme? Returns are exempted from tax. Under Section 80CCD of the Income Tax Act, the money contributed to the National Pension System is exempt from taxation when invested. Furthermore, it is also exempt from taxation when withdrawn. The tax withholding amount from the NPS may be determined in two ways. The following are some examples of NPS tax benefits: Self-contributions to the National Pension System are deductible under Section 80CCD(1). The maximum deduction for salaried workers is 10% of the monthly income. However, for self-employed people, it is 20% of the gross income. Employer contributions to the NPS funds are taxable under Section 80CCD(2). As a result, up to the lesser of 10% of basic + DA or total gross income, the employer’s complete NPS payment may be excluded from taxation. 80CCD does not apply to those who are self-employed. You may also deduct further self-contributions from taxable income under Section 80CCD if the amount invested is less than Rs. 50,000. (1B). Investing gains from an NPS are free from taxation up to a maximum of Rs. 2 million. It provides annual returns of 8-10%. The NPS was launched almost a decade ago. It has yielded annual returns of 8-10%. In addition, you can change fund managers to rebalance your portfolios or pursue other strategies. Automatic and human-operated investment decision-making mechanisms are provided under the National Pension System. In contrast to retirees, younger investors are more likely to take risks. They do this in pursuit of higher returns. The auto-option considers the client’s age while calculating the appropriate level of risk. An active investor can decide where and how to put their money, increasing the likelihood of a positive return on their capital. The equity exposure in NPS is capped at between 50% and 75%. Therefore, when the earning potential is high, the risk is low. An investor’s equity portion is reduced by 2.5% per year once they turn 50. The reduction further reduces risk. Exit procedures are quick and straightforward. If you join the National Pension System, you can make further contributions up to the age of 60. After 60, you can take out the complete account balance. Every investor has to have at least 40% of their invested corpus in the NPS fund to get a regular pension after retirement. After contributing to the pension fund for at least three years, you can withdraw 25% of the total corpus. At most, three withdrawals can be made throughout the investment period. Each must be five years apart. You can pay for a child’s college education, pay off medical bills, and build or purchase a house with the withdrawn amounts. Step-by-Step Instructions for Registering for the NPS You may enrol in the National Pension System by completing the necessary physical or digital paperwork. Indirect Approach Go to any bank recognized by the PFRDA to open an NPS account manually. Submit a subscriber form from the point of contact station and comply with KYC standards for the registration process. A Permanent Retirement Account Number will be created once the first contribution is made after the registration is complete. You can monitor the contributions to your NPS Scheme results using this unique number and the associated password. Digital Approach To apply for the NPS online pay, visit the official website and link a valid PAN card, Aadhaar number, or mobile number. After successful registration, an OTP will be sent to the provided mobile number to create the Permanent Retirement Account Number. You can create credentials and log into the account using those. The National Pension Scheme (NPS) provides Indian retirees with a stable source of income in their golden years by offering a high return on investment (NPS return) and guaranteed payments. In this way, investors with varying degrees of comfort with risk might utilize it to amass a sizable nest egg for use in their golden years. [B-02] Conclusion NPS is a good tool for long-term investments since, across asset classes, returns tend to increase by a predetermined amount over time. There is no specified compounding rate for returns in the National Pension System; nonetheless, you can compute your returns by considering each asset’s compounded yearly growth rate. To learn more about NPS returns, you can consult with an expert at Piramal Housing.
08-11-2023
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Tax Savings

Four Types of Loans that Help you Avail Tax Benefits

Loans provide a massive monetary boost to borrowers, help them cover their multifarious needs, and act as a huge financial backup. In India, it is quite easy to apply for a loan at a nominal interest rate for a longer tenure. The benefits of availing of a loan range from getting enough money to invest in your business venture to covering up your personal needs. There are several other benefits of getting a loan and out of them, tax benefits stand at the top. Since we all pay taxes to the government, it is also our right to avail of tax benefits from different credit systems. However, not all loans give you tax benefits, only four of them do. They are education loans, home loans, car loans, and personal loans. These loans provide different tax benefits to different lenders, depending on their credentials and the ability to repay them. What are the tax benefits that can be obtained from these loans? Read the article further to know what tax benefits these loans provide. This article discusses the provisions and different tax benefits that can be availed from these loans. [B-01] What is an education loan and what tax benefits does it provide? Education, being one of the best investments that hold the potential to give the best returns, also requires to be well financed. It can help you rise in your career, improve your standard of living, overcome distress, and set a financial goal. And to get a good education at a prestigious Institute, you might require an education loan which will help you cover all your education-related expenses. There are various schemes and scholarships that allow you to avail of an education loan at a nominal interest rate. Besides that, an education loan provides certain tax benefits to individual borrowers as well. These benefits come under section 80E: Section 80E: Under Section 80E of the Income Tax Act, 1961, a provision of tax deduction is available for up to 8 years. There will be a deduction of tax until the education loan is repaid. This means if you pay the loan completely within 5 years, the tax deduction will be allowed for 5 years and not 8 years. It is also important to note that there is no limit on the maximum deduction amount from the loan. And repaying the principal amount is not going to make you eligible for availing the tax benefit. Lower TCS (Tax Collected at Source) The benefit of lower TCS can be availed of an education loan if you go for overseas education. If the budget is above 7 lakhs, then a TCS will be applied at a rate of about 5% according to the Budget of 2020. Similarly, if you avail of an education loan from a lending institution in India, you will reduce the TCS rate to 0.5%. What is a home loan and what tax benefits can be availed of it? Having a home is not only a financial goal but also gives you a sense of accomplishment. However, with the increasing market price of properties, having a home with your own money seems like a tough nut to crack. As a result, a home loan helps you get the desired amount at a low-interest rate for a longer tenure. A home loan is financial assistance that helps you to buy, construct, or renovate your home. Besides that, just like an education loan, a home loan provides you with several tax benefits. Section 24(b) Under section 24(b) of the Income Tax Act, 1961, a borrower is eligible to claim a tax benefit of up to INR 2 lakhs per year on the interest amount, provided that the home is a self-occupied property. Section 80 C: You can also claim a deduction of a sum of 1.5 lakh on the principal amount of the home loan per financial year. Section 80 EEA: If you happen to be a first-time borrower, you can claim an additional tax deduction of about 1.5 lakh on the gross total income on the interest amount per financial year including the 2 lakh tax concession under Section 24(b). This means you can claim a tax benefit of about 3.5 lakhs per financial year on the interest amount. What is a car loan and what are some of the tax benefits it provides? Just like a home loan, a car loan is applied to buy a car at an interest rate for a fixed tenure. Like education loans and home loans, A car loan also has some tax benefits. Section 80 EEB: Under Section 80 EEB of the Income Tax Act, 1961, you can claim a tax deduction of about 1.5 lakhs on the interest amount per financial year. Section 32: Under section 32 of the Income Tax Act, 1961, further taxable benefits can be availed of from your car loan. For example, if you buy a car before September 30, you can claim depreciation of about 15% of the price of the vehicle. Whereas, for buying the same car from October 1 onwards, you claim depreciation up to 7.5% of the price of the car. What is a personal loan and what are the tax benefits it provides? Similar to that home loans, education loans, and car loans, a personal loan is financial assistance that helps you meet your requirements like financing a wedding, making a down payment, etc. A personal loan also provides certain tax benefits to the borrowers, however, these benefits are indirect. Section 24(b) : Suppose you want to use the loan amount obtained from the personal loan to repair or renovate a house. In that case, you can avail of some tax benefits under Section 24(b) of the Income Tax Act, 1961. Section 43: Similarly, if you spend the personal loan amount to finance your business, then under section 43, you can claim a deductible expense. [B-02] Wrapping it up There are only four types of loans that provide you avail of tax benefits: Education Loans, Car Loans, Home Loans, and Personal Loans. In an Education Loan, a borrower can claim a tax deduction of up to 8 years with an additional benefit of TCS. In the case of home loans, you can obtain tax benefits under Section 80 C, 80 EEA, and 24(b). In car loans, under Section 80 EEB and 32, tax benefits can be obtained, whereas for personal loan tax benefits, there is no direct tax. If you want to know further about these loans in detail, you should visit Piramal Finance.
08-11-2023
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Home Loan

Everything You Need To Know About Home Loan Processing Fees And Other Charges In 2022

The processing fee is one of the most common fees levied on a home loan. It is a one-time fee set by banks or lenders when the loan application is processed. Most banks impose a processing fee on their home loan programs, while some may not charge it or even waive it as a special offer. The processing fee is usually a percentage of the loan amount. Most banks have a minimum and maximum amount to be charged. The current GST on processing fees is 18%. [B-01] Types Of Fees And Home Loan Charges Purchasing a home is a significant undertaking. In addition to choosing the right property, it is also necessary to choose the right lender. When a consumer applies for a home loan, they must pay more than just the processing cost; other charges or fees may apply throughout the process. Here are a few of the charges levied by the banks: Loan-related fees Document-related fees Legal and Government fees A vital thing to remember is that additional GST is applied to these costs almost every time. Housing Loans And Home Loan Charges Here are some home loan-related costs that a consumer may have to pay: Login Fee – It is also referred to as an “administrative” or “application” fee. Some banks charge this non-refundable amount before the loan is granted. Once the loan is approved, the consumer must pay the processing and login fees. Prepayment Charges – It is also known as foreclosure or pre-closure charge. It is imposed if a consumer desires to pay off the entire loan amount before the loan term expires. Many banks do not charge this fee in the case of a fluctuating interest rate or to salaried individuals. Partial Prepayment Charges – It is levied if someone desires to pay in installments rather than in full. It is possible that if a consumer intends to make many partial payments, they will wind up paying more to the bank. Late Payment Fee – When a consumer skips or delays payment or EMI, this amount is charged monthly until the payment is made. Conversion Charge – When applying for a home loan, a client must choose between a fixed and variable interest rate, and if they want to modify it, they must pay an amount to their bank. Repayment Mode Swap Charge – This fee is applied if a consumer wants to change their repayment style or amount. Recovery Charge – If a customer fails to make payments, the account is placed in recovery, and the bank takes additional steps to recover the amount. In some circumstances, the consumer is charged for the amount spent on total expenses. Insurance Premium – Though this is not a compulsory cost, most banks persuade their customers to get home insurance plans to safeguard them from external damage. Document Related Fees A consumer must also pay additional expenses for paperwork and documentation: Stamping Charge – The bank and customer sign a legal document on stamp paper. The consumer would be required to pay these fees, which are based on the actual cost spent. Income Tax Certification Charge – Although most banks do not charge this fee, they give consumers a provisional or final income tax certification for the home loan and principal repayment amount. The customer will have to pay to get the same thing if they don’t. Interest Certification Charge – If a customer needs a certificate from the bank detailing the amount of interest paid during loan repayment, they must pay an extra fee. NOC/NDC Charge – A consumer must pay these fees to acquire a “no objection” or “no due” certificate. Duplicate NOC or NDC Charges – These are used if someone requests a duplicate NOC or NDC on their loan account. Fee for Revalidation of NOC – If a customer requests that the bank revalidate their NOC, there will be additional fees. Agreement Copy Fee – When a consumer needs the agreement copy for any financial purpose, they must pay a fee to acquire it from the bank. Issuance Charge for Photocopy of Title Documents – The title paperwork remains with the bank until the loan is paid off, and if a customer wants a duplicate copy, they must pay a fee. Duplicate Statement Issuance Charge – In the event of a duplicate statement copy request, banks charge their customers a fee. Amortization Schedule Issuance Fee – If a consumer wants a comprehensive amortisation schedule for their loan term, they must pay a charge to acquire it. Document Retrieval Charge – When the loan is closed, the bank charges a nominal fee to consumers who want to retrieve the original documents. CIBIL Report Fee – Anyone should be able to obtain a CIBIL report online, but if they want their banks to do it, they must pay a fee each time. Legal And Government Fees Here are some legal and government-related fees charged as part of your home loan application: Legal Fees – This is the total of all legal documents created between the bank and the customer during the loan application process. Validation/Inspection Fee – When a consumer purchases an already-built property, the bank charges the consumer a validation or property inspection fee. MOD Charge – MOD stands for “Memorandum of Deposit of Title Deed”, which signifies that the consumer has transferred ownership to the bank until the loan is paid off. This amount varies by state and is determined by the cost of the property. CERSAI Charge – CERSAI is an acronym for “Central Registry of Securitization Asset Reconstruction and Security Interest of India.” When a customer purchases a property, it must be registered with CERSAI, for which an additional fee is levied. [B-02] Summing Up The processing fee is a crucial aspect of taking a home loan. Sometimes you might have to pay this on a fixed term, though it may vary depending on different banks. Read more about housing loans on Piramal Finance today.
08-11-2023
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FD

FD Benefits & Features: Bank vs Company Fixed Deposits

Do you want to invest in fixed deposits? Here, you will learn all about fixed deposits and FD benefits. You will further learn the difference between an FD in a company and FD in a bank. [B-01] What are Fixed Deposits? Afixed deposit or an FD is a safe investment that helps you earn interest income. FDspromise guaranteed returns and involve minimal risk. All interest earnings from FDsare taxable. Let us learn more about FDs. Features of a Fixed Deposit ● The quantum can be deposited only once. ● Any fresh deposits have to be made in separate accounts. ● The interest rate is set in advance. ● The duration ranges anywhere between 7 days and 10 years. ● FDs can be renewed without any hassle. ● Withdrawals can’t be made before maturity. Else, a penalty has to be paid by the client. FD Benefits Guaranteed Returns: One of the main advantages of an FD is the assured returns. This means zero pitfalls as compared to other forms of investments. On maturity, a fixed interest will be paid on the investment quantum. Easy to Open: You can open an FD account within minutes. Moreover, you can apply for it online or go to the nearest bank branch. Advanced Interest Rate: FDs enable guests to earn an advanced interest income as compared to their savings. Flexible Term: You can choose to open an FD account for a period of 7 days to 10 years. Multiple FD Accounts: You can hold more than one FD account at a time. When you want to make a fresh investment, you can always open a new FD account. Tax Benefit: You can claim for duty impunity under Section 80C of the Income Tax Act of India for bank FDs. What are Company Fixed Deposits? Over time, an investment tool that has been a part of many investor’s portfolios is FDs. Whether you’re a risk averse investor or not, FDs are likely to have a seat in your portfolio. Another type of fixed depositthat has become popular over the time iscompany/commercial fixed deposit. Let’s explore more about company FDs. What are Commercial Fixed Deposits? Commercial/ Company fixed deposits are FDs issued by NBFCs, HFCs, and other financial institutions. Rather than banks, financial institutions isue commercial or company fixed deposits. Very often, their interest rates are generally greater than bank FDs. They stay fixed throughout the duration. To invest in commercial FDs you should look at the offered rate of interest and credit standing of the financial institution. The more the credit standing, the lower the threat of dereliction. Features of a Commercial Fixed Deposit Interest Rate Compared to bank rates, commercial FDs have advanced interest rates. Investing in company FD can therefore offer higher returns. Commercial FDs also tend to generally give around 0.25—0.5 higher interest rates for elderly citizens. Credit Conditions An important factor that investors should keep in mind when it comes to choosing commercial fixed deposits, is the credit standing of the issuer. The greater the standing, the lower the risk of default. Credit agencies assign these standing on the basis of the financial health of the issuer, including the comprehensive analysis of the company background, prepayment history, operation quality, etc. Taxation on Returns Both bank FD and commercial FD interestare taxed the same way. The interest is added to the depositor’s income and computed based on the income tax bracket. The TDS charged by the bank or commercial FD issuer is different for these two types of investments. For bank FDs, banks don’t deduct TDS when they add interest to your account if it is more than Rs. 1,000 for people who aren’t seniors. Lack of Insurance Coverage A major disadvantage of commercial FDs is the absence of insurance coverage. Unlike FDs opened in listed marketable banks, commercial/ company FDs aren’t covered under any guarantee scheme.This puts the investor’s money at more risk if the issuer defaults. Cinch-in Period and Unseasonable Pullout Penalty Unlike bank FDs, most companies’ FDs have a lock-in time. During this period, the investor might be unable to get their money back. Most of the time, it takes three months. After the cinch-in period is over, an untimely withdrawal within 3–6 months may result in no interest or a lower rate of interest. However, an untimely withdrawal after 6 months may result in a penalty with a lower rate of interest on the deposit. Further, commercial FDs usually let you take out a loan against your FD for up to 75% of the deposit amount. It is usually at a rate of 2% above the FD rate. Bank FDs, on the other hand, usually let you take out a loan for up to 85%–95% of the deposit amount, usually at a rate that is 0.75%–2.5% more than the FD interest rate. [B-02] Summing Up FDs are one of the best investment options in India. One of its key benefits is assured returns. With a flexible tenure, you can always set your deposit according to your requirements. Visit Piramal Finance to read more in-depth, finance-related blogs.
08-11-2023
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Personal Loan

Farmer Funding – Apply for Loan for Farmers Online

Farming is the backbone of Indian society and the entire country depends on it. Farming requires different inputs like seeds, fertilisers, pesticides, etc. for cultivating and harvesting crops. And to meet such an intense demand for inputs, farmer funding is quite important. To help the farmers meet all these requirements, the Government of India has launched various schemes. Agricultural loans can help you purchase land, and agricultural tools like sickles, ploughs, tractors, handpumps, etc., and bear the cost of ploughing, weeding and harvesting the crops. Funding for farmers will help them cover these needs at a lower interest rate. In this article, you will come across different farmer funding schemes, their features and benefits, and the right process to apply for farmer funding. [B-01] What are the different farmer funding schemes available in India? Several banks provide loans to the farmers at subsidised interest rates. However, the tenure of repayment and the loan amount vary according to your chosen bank. Kisan Power Scheme: This agricultural loan scheme provides credit to the farmers to cover the cultivation and post-harvesting expenses. The allowed loan amount for Kisan Power Scheme is between the range of INR 25,000 to INR 2,50,00,000. Banks give you 3.5 years of tenure to repay the Kisan Power loan. Kisan Matsya scheme: You should apply for farmer funding schemes focusing on other agricultural activities like fishery and poultry farming. Kisna Matsya scheme is one such scheme that provides credit to the farmers who want to invest and meet the recurrent expenses in fishery farming. You can get up to INR 1.5 crores as a loan amount for 1 year to 5 years. Poultry power scheme: This farming loan scheme incentivises farmers to finance working capital and cover their term loan requirements in poultry units. The loan amount under this scheme is between INR 2,00,000 to INR 5 Cr, and the maximum repayment tenure is 5 years. Dairy Power Scheme: This exclusive farmer funding scheme extends credit facilities to animal husbandry. Farmers associated with dairy farming can apply for a farmer funding scheme like this. The loan amount ranges between INR 25,000 to INR 5 lakhs, and the maximum repayment tenure is up to 3 years. PM KUSUM (Pradhan Mantri Kisan Urja Suraksha evam Utthan Mahabhiyan) scheme: This is a very good scheme for farmers who want help installing standalone agricultural pumps and solarising grid-connected agricultural pumps. You should apply for a farmer funding scheme like this if you want the tenure of the loan to be about 7 years, including a moratorium period. The loan amount that can be sanctioned to a farmer is between INR 25,000 to INR 2.5 Cr. What documents are required to apply for a farmer funding scheme in India? You need basic documents to apply for a farmer funding loan online. The loan application form from your bank should be duly filled with all your details and signed. You need to show your recent passport-size photographs, and in case you have a co-borrower, you need that as well to apply for farmer funding schemes. Your identity proof includes your Aadhaar Card, Voter ID Card, PAN Card, Driving license, etc. Your address proof includes your proof of your residence and proof of your registered office. Your proof of registration and your GST certificate, if applicable. For income proof, you need to show your IT Returns for the last three years, the audited balance sheet for the last three years, and the last year’s bank statements. You have to show your land ownership records, the ROC search report of the company, and the KYC documents of your company to apply for a farmer funding scheme. You will also be asked for local authority permissions, estimates, detailed business plans, etc. What is the eligibility to apply for a farmer funding scheme in India? You need minimum eligibility criteria to qualify to apply for a farmer funding loan in India. They are: You should be between the age group of 18 years to 70 years to qualify for the eligibility of farmer funding scheme. You must pledge some of your necessary assets and use them as collateral to get a loan. Based on your terms and conditions and age, loans can either be applied on an individual basis or a joint basis. For example, some banks ask for a co-applicant if the borrower is 60 years or above. What is the process to apply for a farmer funding scheme online? Here are some simple steps to follow to apply for farmer funding online. Visit the official website of the preferred bank and go to the “farmer loan application” section. Fill in all your details like your name, contact number, address, PIN code, etc., and submit the photocopies of all the desired documents. Verify all your documents and information before filling out the security key. Now click on “submit” and wait for a bank official to contact you within a few days. Besides this, you can also send an SMS to the toll-free number of your bank and let the bank know that you want to apply for a farmer funding scheme. A bank representative will catch up with you as soon as you do that. [B-02] Summing it up: Incentives to farmers in the form of loans are a great way to promote agricultural growth and meet production demands. To apply for farmer funding schemes, you need to be well-versed with the eligibility criteria, the documents required, and the type of loan you are interested in. You can use an Agri EMI calculator to calculate different offers and decide the best for you. If you liked this article and want to read more about credit and loan systems, you can visit Piramal Finance. Not only does it have a credit system, but it also has plenty of engaging content regarding different investment schemes, tax planning, trading, etc.
08-11-2023
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Tax Savings

Top 8 Ways to Avail Tax Benefits on a Home Loan in 2022

First-time home buyers are more likely to finance their purchase with a mortgage, which benefits the economy by generating revenue for banks and financial institutions through interest payments. To encourage more people to buy a home, the government provides numerous tax breaks under the Income Tax Act of 1961. As a result, owning a home benefits both you and the government. By fully utilizing all income tax benefits, you can significantly reduce your tax bill. Therefore, you should become familiar with all of the provisions and take steps to claim tax benefits under all applicable sections. This is where financial planning comes into play. The Equated Monthly Installment (EMI) of your housing loan is made up of two parts: principal and interest. Both components entitle you to tax breaks under different sections. The interest component is deductible under Section 24, while the principal portion is deductible under Section 80C of the Income Tax Act, 1961. [B-01] The following are the top 8 ways to avail of tax benefits on home loans in 2022: 1) Tax deduction on repayment of the principal (up to Rs 1.5 lakh under Section 80C) You qualify for a tax deduction of up to Rs 1,50,000 a year on the repayment of the principal of your housing loan. This deduction is allowed on both self-occupied and rented-out houses. Under this section, registration fees and stamp duties are also deductible. However, the catch is that the construction of the housing property should be fully completed in order for you to be eligible for this tax deduction. Also, if you go on to sell the house within five years, you will forfeit all the tax benefits you have claimed under this section. 2) Tax deduction on interest payments under Section 24 You are eligible for tax deductions on the interest paid on your housing loan under Section 24(b) of the Income Tax Act, 1961. For self-occupied housing properties, you can claim a tax deduction of up to Rs 2 lakh a year. If you have two housing loans, you can claim a maximum of Rs 2 lakh in tax deductions under this section. If your housing property is under a housing loan and is rented out, the entire amount paid towards interest is tax deductible. 3) Claim tax benefits on interest paid on under-construction property The interest paid on home loans availed for purchasing a property under construction is eligible for tax deductions. The Income Tax Act, of 1961 provides provisions to claim deductions on interest for both pre-construction and post-construction periods. The interest paid during pre-construction is permitted as a tax deduction in five equal annual installments, starting from the year in which the construction gets completed. 4) Claim tax benefits under Section 80EE If you are a first-time home buyer, you are eligible to claim tax deductions of up to Rs 50,000 a year on the interest payments under Section 80EE of the Income Tax Act, 1961. This deduction is over and above the benefits provided under Section 80C and Section 24. However, the cost of the purchase of the housing property must be less than Rs 50 lakh, and the loan availed should be less than Rs 35 lakh. Also, this loan should be sanctioned between 1 April 2016 and 31 March 2017. Tax benefits under this section can be claimed as long as the loan repayment is being made. 5) Claim tax benefits on interest payments under Section 80EEA In order for you to qualify for this deduction, the housing loan must be approved by an eligible financial institution between April 1, 2019 and March 31, 2022. Under Section 80EEA, home loan borrowers get an additional deduction of Rs 1.5 lakh a year on the interest paid on the housing loan. However, the stamp duty value of the housing property should be less than Rs 45 lakh, and the individual should be ineligible for deductions under Section 80EE. The eligible taxpayers should be first-time home buyers. If the house is bought through a joint home loan, then all borrowers are eligible for this deduction, provided they meet all other criteria. 6) Claim joint home loan tax benefits under Section 24 and Section 80C If you have jointly availed of a home loan, then all the co-borrowers of the loan will be eligible to claim tax deductions of up to Rs 1.5 lakh under Section 80C and up to Rs 2 lakh under Section 24(b) on principal and interest, respectively. However, the catch is that all the co-borrowers are required to be co-owners of the housing property purchased through the housing loan. 7) Maximize the benefits of a second home loan Until recently, a second housing property was treated as let out, and the income generated through that property was taxed as income. However, in the 2019 Union Budget, the government decided to provide more incentives for investments in housing properties. As per this, a second housing property is also treated as a self-occupied one. According to current provisions, tax benefits can be obtained with payable interest. The entire amount paid towards the interest of the home loan is allowed as a deduction, which entails a lot more in tax savings. 8) Claim tax deductions on registration charges and stamp duty Section 80C of the Income Tax Act of 1961 allows the expenses incurred on stamp duty and registration charges to be claimed as a deduction. You can claim these charges as a deduction in the same year as they incur. [B-02] Conclusion Purchasing a housing property through a housing loan is definitely a big and long-term commitment. To reduce your tax liability, you have a range of tax deductions available under the Income Tax Act of 1961. It would only be wise to maximize the tax benefits under these provisions.
08-11-2023
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Home Loan

All You Need To Know About Home Loan For Salaried Persons

Are you a salaried person looking for an affordable and convenient way to buy a home? Home loans and housing loans are great options for salaried individuals, as they provide easy access to funds to purchase a home. In this blog post, we’ll cover everything you need to know about a home loan for salaried persons, from eligibility requirements to loan repayment options. Read on to learn more. [B-01] Home Loan- An Overview When you’re looking to buy a home, the process can be overwhelming. However, a home loan is one of the most common ways people finance their dream home, and understanding the basics of housing loans can help make the process easier. Banks or other financial institutions usually provide a home loan. In most cases, they have secured loans, meaning they are backed by collateral—usually your home itself. The amount you can borrow depends on various factors, including your credit score, income level, and property value. The terms and conditions of a home loan vary depending on the lender. Common home loan terms are 15, 20, or 30 years. You will also need to make monthly payments to your lender that include both the principal (the amount you borrowed) and the interest. When you apply for a home loan, you’ll likely need to provide some documents like bank statements and tax returns to prove your income and creditworthiness. Your lender may also require you to purchase private mortgage insurance if you don’t have a large enough down payment. The Eligibility Criteria It’s important to understand what requirements you must meet in order to apply for housing loans in India. The person must be between 23-62 years of age. The applicant should be a salaried employee or a self-employed individual with a regular source of income. Their income must be more than Rs. 25,000 a month, depending on the city of residence. Their credit score must be above 750 to apply for housing loans. The Documents Required Before applying for a home loan, it is important to know what documents are required to get the loan approved by the lender. The lender will use these documents to assess your creditworthiness and determine whether or not you qualify for the home loan. Proof of Identity: This includes documents such as a passport, driving license, PAN card, or Aadhaar card. Proof of Residence: This includes documents such as an electricity bill, landline bill, water bill, or rental agreement. Income Proof: This includes salary slips, bank statements, and income tax returns. Bank Statements: You will need to provide copies of your bank statements for the last three months. Property-Related Documents: You will need to provide documents such as the sale deed, title deed, mutation certificate, and other relevant documents related to the property. It is important to remember that each lender may have different requirements regarding the documentation they require. Be sure to check with your lender beforehand to ensure you have all the necessary documents ready when applying for your home loan. The Application Process for Housing Loans For salaried persons in India, the process is relatively straightforward and easy to understand. The first step to obtaining a home loan is to gather all of your financial documents and prepare them for submission. These documents include your income tax returns (ITR) for the last two years, salary slips, and any other documents related to your finances that you may need to provide. Once you have all of these documents together, you will need to fill out an application form provided by the lender. Once the application form is completed and submitted, the lender will assess your eligibility based on their criteria. After they approve your application, they will issue you a sanction letter outlining the terms and conditions of the home loan. The lender will verify all the documents and check for any discrepancies before disbursing the home loan amount. Once the lender provides the loan amount, you will need to start making timely repayments according to the loan repayment schedule provided by the lender. It’s important to note that late payments may result in additional charges or even foreclosure of housing loans, so be sure to make payments on time every month. The Benefits Of Housing Loans If you’re a salaried individual, taking out a home loan can be one of the most rewarding investments you make. While it’s true that the responsibility for managing and paying off the loan comes with it, the potential benefits far outweigh the risks. Here are some of the key advantages of opting for housing loans if you’re a salaried individual: Affordable interest rates- The interest rate on your home loan is determined by factors such as your personal credit score, income bracket, and type of employment. As such, whether you opt for a fixed-rate or an adjustable-rate mortgage will depend on which kind of rate suits your needs best. Quick loan disbursal- Generally, it takes less than 48 hours to complete all paperwork and get the final approval from verified lenders. In comparison, when applying for other loans, you would need at least a month to obtain formalities like background checks and character verification before getting into negotiations about your eligibility for funds. Lower risk– You also have lower risk when investing in a home because many banks offer insurance against unexpected events like death or disability, where they would pay back part or all of the outstanding balance on your mortgage, should anything happen to you. Tax benefits- Taking out a home loan also allows you to avail several tax benefits. The Indian government has various tax deduction schemes, such as Section 80C of the Income Tax Act, which lets you deduct up to Rs. 1.5 lakh on the principal component of your home loan. [B-02] Conclusion Understanding how housing loans work is essential for making an informed decision when it comes to financing your dream home. It’s important to know what kind of loan you’re getting into, how much you can afford, and what kind of terms you can expect. With the right knowledge, you can find the best loan for your financial situation. For more information, head over to Piramal Finance.
08-11-2023
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Business Loan

7 Reasons Why an Unsecured Business Loan is the Best Option for Small Businesses

Starting your own small business is a dream for many. The idea of being your own boss and not working for anyone else is fascinating. However, running a business takes a lot of investment. To put it bluntly, you need money to be able to pay your own expenses, purchase machinery and equipment, cover operational costs, and keep the lights on at the office. The need for funds is never-ending. A mere lack of money should not come between you and your dream of running a small business. This is why taking an unsecured bank loan might be helpful for your small business. This will allow you to grow as a business owner without worrying about the amount of money you have on hand. [B-01] What is an unsecured business loan? An unsecured business loan is a type of loan. It does not require any collateral to be provided by the borrower to avail of the funds. The lenders do not rely on the borrower’s assets as security. They approve an unsecured loan based on the creditworthiness of the borrower. Top 7 reasons why taking an unsecured business loan is beneficial for small businesses: Easy application process and minimal documentation: The process of acquiring a business loan usually takes a long time. This is because the lender needs to carefully examine each aspect of the application. These are the borrower’s financial status as well as business reports, plans, and more.This is particularly true for secured business loans. The borrower has to provide additional documentation, such as assets and documents. The lender has to evaluate the value of the collateral before deciding what amount should be given. This is a lengthy and time-consuming procedure. The disbursement process for an unsecured business loan is much simpler and faster. It requires only minimal documentation. Primarily, the borrower has to provide scanned copies of his identification proof, address proof, and a cancelled cheque. However, certain loan companies may also require proof of the existence of your business as well as bank statements and other financial documents that are relevant to verifying the authenticity of your business. No collateral requirement: As the name suggests, these business loans are “unsecured.” This means that they are not secured by collateral. Unsecured loans provide the borrower with the funds needed without being backed by collateral. There is no requirement to secure the loan with assets like property, vehicles, or other assets. This option is especially advantageous for small businesses that are just starting and do not have a tangible asset to offer as collateral. This is why obtaining an unsecured business loan is easier for small entrepreneurs who have just begun their ventures. Flexible tenure: Unsecured business loans in India offer an option for flexible repayment terms. Most often, the loan can be arranged for a shorter time. For most financial institutions, the repayment period is 12 to 36 months. Flexible terms allow business owners to pay off the balance in a shorter time and still have their budget in place. The flexible and shorter time frame will also permit borrowers to maintain a positive cash flow. Improves credit score: Unsecured loans usually come with a shorter repayment tenure. This makes it easier for business owners to repay the loan amount. This in turn may help improve their credit scores. An improved credit score can help you get a business loan at lower interest rates in the future. Quick fund disbursal: The online application facilitates the processing of any business loan request much easier. If the applicant meets the eligibility criteria as set by the business loan provider, the loan application will be processed more quickly, and the loan amount will be immediately approved. Moreover, no collateral is required to obtain an unsecured business loan. This makes the process quick and hassle-free. The criteria for approval are relatively easy. There is no need for collateral. So a small business owner can get this kind of loan in a matter of minutes. Provides working capital: One of the major challenges faced by small businesses is the absence of liquid assets. They require a steady flow of cash to pay for the cost of working capital. The absence of funds to meet day-to-day expenses could put the company at risk. However, the right amount of working capital can help companies meet various needs. These may be debts from creditors, utility bill charges, inventory purchases, and many more. Unsecured business loans can provide an opportunity to help in times when funds are needed immediately. No shared ownership: Most small businesses in their early stages choose to take advantage of alternative funding from venture capitalists or angel investors. They do this to start and expand their operations. To avail themselves of funds, business owners have to share ownership rights through profit sharing. However, in the case of an unsecured business loan, the owner does not have to compromise his property or his stake in the company. Any profit that a business owner can earn through a business loan is exclusively for him to benefit from. He does not have to share any of the profits with the lender. [B-02] Conclusion The above-discussed reasons prove that an unsecured business loan is the best option for small businesses to make a fresh start. If you have been thinking about taking out an unsecured business loan to help finance your venture, now might be the perfect time to do so. Explore your options and discover a financial institution that can help you secure the best unsecured business loans with ease.
08-11-2023
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Stocks Markets

ETFs Vs Stocks – Difference

For many beginning investors, deciding whether to invest in stocks or ETFs can be daunting. This blog post will explore the difference between stocks and ETF funds. We’ll touch on topics such as liquidity, fees, and diversification so that by the end, you’ll better understand which investment is right for you. [B-01] Defining Stock A stock is a type of security that represents ownership in a company. When you buy shares of a company’s stock, you become a part-owner of that business. As an owner, you can vote on corporate matters and receive dividends if the company declares them. Stock Classifications There are two main types of stocks: common stocks and preferred stocks.Common Stocks Common stocks represent ownership in a company. When you purchase a share of common stock, you become a partial owner of that company and are entitled to vote on corporate decisions and receive dividends. Common stocks are more volatile than preferred stocks, which means they have a higher risk of loss, but they also have the potential to generate greater returns over time.Preferred Stocks Preferred stocks represent ownership in a company, but unlike common stockholders, preferred shareholders do not have voting rights and do not receive dividends. Instead, preferred shareholders receive fixed payments (called “dividends”) before any dividends are paid to common shareholders. Preferred shares also typically have a higher claim on assets than common shares if a company is liquidated. However, because preferred shares have fixed dividend payments, they tend to perform worse than common shares when the stock market is rising. Defining ETF An Exchange-Traded Fund (ETF) is a type of investment fund that trades on a stock exchange and tracks a specific index, commodity, or basket of assets. ETF investing issimilar to mutual funds in that they comprise a pool of underlying investments but trade like stocks on an exchange. ETF funds can offer investors exposure to various asset classes and investment strategies. They can be used to hedge against specific risks or to pursue targeted investment objectives. ETF Classifications There are many different types of ETFs on the market, each with its unique investment strategy. Some popular types of ETF funds include: Equity ETFs These funds invest in stocks and are ideal for investors who want exposure to the stock market without picking individual stocks. Some popular equity ETFs in India include the Nifty 50 ETF, the S&P BSE Sensex ETF and the Nifty Bank ETF.Debt ETFs Invest in fixed-income instruments, such as bonds and are suitable for investors who want to earn regular income from their investments. Popular debt ETFs in India include the Bharat Bond ETF, the corporate bond ETF and the government securities ETF. ETFs and Stocks – Similarities Here are a few of the most important similarities between ETFs and stocks: They’re both regulated by SEBI. They can both be bought and sold on stock exchanges. The prices of both ETFs and stocks are determined by demand and supply. You need a Demat account to invest in either ETF funds or stocks. ETFs and stocks can expose you to various companies and industries. Investors can use stop-loss orders for both ETF investing and stocks. Both ETFs and stocks incur brokerage fees when they are bought or sold. Stocks and ETFs – Differences Here are some key differences between stocks and ETFs: Stocks represent an ownership stake in a company, while ETFs are simply baskets of assets that may track an index, sector or theme. Stocks can be bought and sold on major exchanges such as the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE), while ETFs are traded on the stock market like any other security. Unlike stocks with a finite number of outstanding shares, ETFs can issue new units when demand is high, making them more liquid than stocks. When you buy a stock, you become a shareholder of that company and are entitled to voting rights and dividends if declared. On the other hand, ETFs do not confer any ownership rights to investors. Stocks are generally more volatile than ETFs since they are subject to the price movements of the underlying company. ETFs are more stable since they track an index or basket of securities. Stocks are priced according to supply and demand in the market, while ETFs have a net asset value (NAV) calculated at the end of each trading day. Due to their lower liquidity, brokerage fees for buying and selling stocks are typically higher than for ETFs. No minimum investment amount is required for buying stocks, but most mutual fund houses require a minimum investment of Rs 5000-10,000 for purchasing ETF units. Stocks are subject to capital gains taxes when sold at a profit, while ETFs may be exempt from such taxes depending on the fund’s structure. Stocks can be more volatile than ETFs since they are subject to the fluctuations of a single company. ETFs tend to be more stable since they are diversified across multiple companies. If a company goes bankrupt, its stockholders may lose their investment, while investors in an ETF may not lose anything if one of the companies in the basket goes bankrupt. Stocks represent shares of ownership in a company, while ETFs are baskets of assets that may include stocks, bonds, commodities, or currencies. What Should You Invest In – Stocks or Exchange-Traded Funds? Generally, stocks are more volatile than ETFs and offer the potential for higher returns. However, they also come with more risk. ETF investing tend to be more stable and offer lower returns but with less risk.So, which should you buy? It depends on your investment objectives and risk tolerance. If you’re looking for long-term growth and are willing to stomach some volatility, then stocks may be a good choice. ETF funds may be better if you’re looking for stability and income. [B-02] Conclusion If you’re considering investing in either stocks or ETFs, it’s important to understand their differences. Stocks represent ownership in a company, while ETF funds are baskets of securities that track an index. Both have pros and cons, so research is important before deciding which is right for you. Visit Piramal Finance, where you can find similar articles and get started in stocks and ETF investing with the help of a professional if you are interested in learning more about ETF funds and/or Stocks.
08-11-2023
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