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How Your EPF Can Help You Buy Your Dream Property In India

Buying your own property is the dream of every person. Have you ever considered using your EPFO money to pay for the house of your dreams? The Employees’ Provident Fund (EPF) in India is a government-backed retirement savings scheme for salaried individuals. It offers a convenient and tax-efficient way to save a portion of your income for the future. Along with providing financial security in old age, the EPF can also be used to purchase a dream property. By strategically using your EPF savings, you can turn your housing aspirations into a reality. However, it’s essential to keep in mind the guidelines and rules set by the EPFO regarding the use of EPF funds for property purchases. With careful planning and proper utilization of EPF savings, it’s possible to make your dream of owning a home a reality. [B-01] The lock-in period for the Provident Fund (PF) scheme is 15 years. It is a closed-ended investment. As a result, when you are encouraged to invest in PF, the image of money locked away in a closet hangs over your head. Nevertheless, there are some procedures in place for investors so they can take advantage of their provident fund savings before the 16-year period has run its course. Not many people are aware that provident fund savings can be utilised to acquire real estate. Let’s examine how this functions. One way to realise your desire for a home is to use your provident fund to buy a property. Firstly, let’s understand the various types of provident funds. When you first began working, you must have heard the word EPF. Employees’ Provident Fund Organization (EPFO), based in India, manages the EPF account. A portion of the pay (now 12%) is contributed to this account by the employee, and the company also contributes the same amount. It is very different from PPF (Public Provident Fund). PPF, or public provident fund, is a savings account that may be opened at any State Bank of India branch. Here are some of the key distinctions between EPF and PPF: EPF is only intended for salaried employees, but a PPF account can be owned by a child. The tenure of your employment and the tenure of the EPF coincide. When you leave your company, you can request that the EPF money be withdrawn and the account closed. On the other hand, money held in a PPF cannot be withdrawn early. Based on the amount deposited in PPF, the depositor may request a loan from the bank (more about it in the next section). PPF interest is tax-free, however, employee provident fund profits in the form of interest constitute taxable income. Using the Public Provident Fund to Buy a Property Even though there is a 15-year lock-in term when investing in a public provident fund plan, you can still utilise the money by taking out a loan after five years of contributions. The money can be used to build the property or to purchase an already-built property. If you and your spouse jointly or alone own the plot, you may also borrow money from the provident fund. The amount of a loan you can obtain through the provident fund plan depends on its use. For instance, if a loan is used to purchase real estate, the maximum amount that can be borrowed is equal to the number of accumulated pension funds up to the maximum amount of two years’ worth of basic pay plus dearness allowance. The maximum amount of accumulated PF is the only limit on loans for the purchase of a built-in house or construction. The loan amount is equal to the salary for three years plus the cost of living. Home loans are provided up to the lesser of the property’s cost and the amount of accumulated PF. One can withdraw money from PF for upgrading an existing property in addition to building a new home or purchasing a property that has already been built. It is not required that this property match the one for which the loan for development or acquisition was obtained. The property that will be built may be owned jointly by the husband and wife or by either spouse. Provident fund scheme’s conditions for money withdrawal If house construction is to begin right away or within six months of the withdrawal, you may take money out of your provident fund. The completion must be completed within a year as well. Similar requirements apply for using the money for purchases: the property must be bought within a year following the money’s withdrawal. There should be a ten-year gap between any two provident fund withdrawals. As a result, after taking out a home loan from your provident fund to buy a property, you can only withdraw again for improvements ten years after the first time, provided there is still money in your PF account. If funds are to be withdrawn to enhance a built-in property, five years must have passed after the building was finished. The PF amount may also be applied to the repayment of a mortgage! You can certainly check your provident fund account if you have a home loan and need assistance paying it back. If you wish to use the money from your provident fund plan to pay off a home loan that you or your spouse took out jointly is also an option. The maximum amount that can be taken for the payment is the whole amount accrued in PF (less what is necessary to maintain the account), up to the equivalent of three years’ salary and dearness allowance. The entity does not have to be an individual to use this service. Publicly recognised organisations like municipal corporations, state and federal governments, registered non-cooperative societies, and any other development authority may also make withdrawals, but only for residential use. Key PPF withdrawal guidelines What amount can be taken out of a PPF account?The maximum withdrawal amount is, in fact, subject to several conditions. The PPF account cannot be tapped until five years of contributions have been made, as was previously stated. 50% of the closing sum at the beginning of the fifth year of contributions is available for withdrawal. By way of example, if the PPF balance is 1 lakh at the end of the fourth year, only 50,000 can be withdrawn at the end of the fifth year. The closing balance utilised for computation in years longer than five years will also be the total accumulated after the previous year. Only loans that are within the PPF account’s maximum withdrawal amount are permitted. In a given fiscal year, you are only permitted one withdrawal from your PPF account. Only once the initial loan has been fully repaid is a second loan from a PPF account authorised. Regulations regarding EPF account withdrawals If you work for a salary, you can join the EPF plan and put aside a portion of your pay as long as you continue to work for the same company. The employee provident fund organisation (EPFO) has policies in place to support its members who desire to buy real estate. The following regulations apply: * A home purchase may require a withdrawal of 90% of the EPF account‘s value. If the building cost turns out to be less than the amount taken or if the property is not allocated for any reason, there is a provision for re-depositing the withdrawn cash back into the account within a month. Additionally, the EPF money may be withheld for loan repayment. For this reason, a specific form called Annexure I is supplied, in which the loan applicant is required to fill out all pertinent information. *Following repayment, Annexure II is released with information on the balance of the EPF and the subsequent payments to be made into this account. To allow the EPF account manager to pay the home loan EMIs with the money that has accumulated in the account. *Annexure III must be completed. This Annexure must be completed in conjunction with Annexure I. Once a member leaves the company and closes the account, the EPFO is not responsible for paying any EMI or associated fees. Forms needed to take money out of your PPF account SBI offers Form C for submitting requests for partial withdrawals from PPF accounts. To withdraw the allowed amount, one must include their account number and PPF enrolment start date. In addition to SBI, 22 other banks also provide PPF account options. You can open a PPF account at any of their PPF branches and follow the necessary procedures to withdraw funds to purchase property following the conditions set forth. [B-02] Conclusion This programme is definitely for you if you are conscious of your monthly or daily expenses and have the financial means to purchase a home. However, the programme also has several provisions to build your value property if you are unable to pay a lump sum for your dream home. For more consultancy services visit Piramal Finance Website. In either case, the EPF housing programme is only offered to ensure that you can still purchase your ideal home even if you do not have sufficient cash flow.

08-11-2023

Guide

New Revised Income Tax Slabs: Rates for New Tax Regime Announced in Union Budget 2023

The Union Budget of 2023 has brought several changes to the Indian income tax norms. For the fiscal year of 2023-24, taxpayers can look forward to a beneficial tax regime with reduced income slabs from six down to five. In the recently revised tax slab, exempting average citizens from paying taxes has been made easier- with a raise in basic exemption limit to INR 3 lakh compared to previously at INR 2.5 lakh and an increase in rebate under Section 87A for those earning up to a taxable income of INR 7 lakh per annum! This new tax regime tries to strike a balance between taxpayers and the government, providing tax relief, while at the same time, contributing towards the country’s development. That is, those who select the revised income tax slab for FY 2023-24 and have a yearly salary of no more than INR 7 lakh will not be subjected to any taxes whatsoever! Moreover, this freshly designed tax system is set as the default choice, although citizens are given leeway to remain with their already planned payment procedure. In a major win for taxpayers, the government has slashed the highest rate surcharge from 37% to an impressive 25%, breathing life into the new tax regime. [B-01] What is an Income Tax Slab? The income tax slab is a set of income brackets for which income tax needs to be paid in India. Each income level within the bracket has its own income tax rate, which the taxpayer must pay based on their income in that financial year. This system ensures that those with a higher income are taxed at a higher rate. Individuals who fall into one income bracket are subject to paying only the amount applicable to them, while those who exceed it will have to pay more income tax according to the rates applicable to their respective income levels. The Income Tax Act determines these slabs every year. For FY 2023-24, five new income tax slabs were introduced with reduced rates and enhanced basic exemption limits, which will help taxpayers save on taxes! Revised Income Tax Slab FY 2023-24 Under New Tax Regime No matter what age you are, everyone is subject to the same tax slabs under this new income tax regime – no longer will individuals be distinguished from one another by their age. The old-fashioned system of taxation has been replaced with a more equitable and fairer alternative! SlabOld Income Tax Regime Slab Rates New Income Tax Regime Before Budget 2023 (Until 31st March 2023)New Income Tax Regime After Budget 2023 (From 1st April 2023 – March 2024)₹0-₹2,50,000NilNilNil₹2,50,000 -₹3,00,0005%5%–₹3,00,000-₹5,00,0005%5%5%₹5,00,000-₹6,00,00020%10%5%₹6,00,000-₹7,50,00020%10%10%₹7,50,000-₹9,00,00020%15%10%₹9,00,000-₹10,00,00020%15%15%₹10,00,000-₹12,00,00030%20%15%₹12,00,000-₹12,50,00030%20%20%₹12,50,000-₹15,00,00030%25%20%>₹15,00,00030%30%30% The revised income divisions have drastically reduced the total tax expenses for middle-income earners, providing much-needed financial relief. The income tax changes have been created to make life easier for everyone and encourage more people to come forward and pay taxes. As the new regime tax slab takes effect, taxpayers will be able to save money on their income tax bills with the help of these revised slabs. With the government’s initiative towards simplifying income taxation, India’s taxpayers can now look forward to a simpler and more efficient income tax system. Factors to Keep in Mind before Opting for New Income Tax Slab There are numerous factors that need to be taken into consideration when it comes to Indian income tax slabs. If you have income from sources other than salary income, then income from these sources needs to be considered while calculating the total income, based on which income tax slab can be decided. Taxpayers must determine whether they will gain more benefits by choosing the old regime or the new one before making a decision. Any deductions available under Chapter VI-A, such as HRA and Standard Deduction, should also be taken into account. Moreover, taxpayers should always review their income and taxes paid at the end of each financial year and pay any outstanding dues promptly to avoid any penalties and notices. If you, as an individual or a member of a Hindu Undivided Family (HUF), do not have any business income for the given year, then this option can be exercised on or before its due date. Finally, as a taxpayer, you have the choice to pick either of the two tax regimes. However, once you’ve chosen your preferred option and submitted it for processing, you cannot revert back or make any changes until the end of that financial year. If you choose to revoke your decision for the subsequent tax regime and revert back to the previous one, it is possible for you to select the new tax slab again during this financial year. How the Income Tax will be Calculated for FY 2023-24 Under the New Regime? To better understand the new income tax slab 2023 calculation, let’s take an example of an individual earning income of Rs.12 Lakhs, which falls in the income tax slab of Rs.9 lakh to Rs.12 lakh. The income tax payable by the individual will be calculated as follows: Total Income (Gross)Rs.12 Lakh Travel and Medical AllowanceNILHRANILDeductions (80C, 80CCD)NILIncome that is TaxableRs.12 lakhUp to Rs.3 lakhNILRs.3 lakh – Rs.6 lakhRs.15,000Rs.6 lakh – Rs.9 lakhRs.30,000Rs.9 lakh – Rs.12 lakhRs.45,000Rs.12 lakh – Rs.15 lakhNILTotal Tax to be PaidRs.90,000 Major Highlights of India’s Income Tax Announcement Introduce a state-of-the-art IT return form to ensure maximum efficiency. The presumptive taxation turnover limit has been raised to 75 lakhs for professionals, with a cash receipt limit of no more than 5 percent. Place precedence on technology-based tax governance for maximum efficiency and efficacy. The finance minister proudly announced that the amount of time taken to process returns has drastically decreased from 93 days down to a mere 16. 45% of filed returns are processed within 24 hours. For those earning 15 lakhs, their tax responsibility is a mere 1.5 lakhs – an incredible bargain! [B-02] Conclusion The new income tax slab announced in Union Budget 2023 has further simplified income tax deduction and improved the ease of filing income tax returns. Individuals can now save more on taxes thanks to this income tax new regime’s lower income tax rates, increased basic exemption limits, and a variety of other benefits. To ensure maximum efficiency and accuracy, taxpayers should thoroughly review their income sources before opting for a particular income tax slab for FY 2023-24.

08-11-2023

Cards

How Can You Avail the Benefits of a Free Credit Card in 2022

There are no annual or membership fees with a lifetime free credit card. Free credit cards are designed for people who are just starting their careers or have never had a credit card before. Those who would prefer not to pay any card fees at any point in time also benefit from lifetime free credit cards. There are a few quality credit cards in this category, but the majority merely offer the bare minimum. [B-01] How to Get a Free Credit Card? Knowing which credit card you need When choosing a credit card, it’s important to consider how you want to use it. For frequent fliers, a “travel credit card” may be a good choice because it offers perks like lower hotel rates and access to airport lounges. Credit cards can be broken down into categories based on their intended use. For example, an “entertainment” credit card might give discounts on movie tickets, while a “business” credit card might provide the option of advance credit to the cardholder’s business. With no annual fees, a free credit card for life might be a great perk for individuals who keep their finances in order and carry a little debt. There are a wide variety of shopping credit cards to pick from if you are interested in perks like cashback and rewards. Since there are many alternatives, the first order of business in applying for a free credit card is settling on the type of card you intend to use. Make sure you qualify for a credit card before applying for one Getting a free credit card today is simpler than ever, and most financial institutions have enticing promotions to draw in new cardholders. Before applying for a credit card, you should make sure you are of legal age and have sufficient income to cover the annual fee. People in India can get a credit card from most banks if they are between the ages of 21 and 65. You need to be earning a regular wage to qualify for a free credit card, and the type of card you can get depends on your income bracket. You can get a credit card even if you don’t have a regular paycheck, and many financial institutions actively seek out self-employed people who can benefit from their services. Several financial institutions will issue credit cards secured by your fixed deposit balances. One can also get a supplementary credit card that can be linked to an existing credit card in the family. No minimum age requirement or proof of income is required for an additional cardholder. You only need to be 18 years old and an Indian citizen or a non-resident Indian (NRI). Prepare the necessary paperwork Before applying for a free credit card, you should first make sure you meet the criteria for receiving one. Every credit card application will require these files. Tax filings Bank statements Payslip Some more acceptable forms of identification are voter ID cards, driver’s licenses, and pension books. A valid driver’s license, ration card, or passport is acceptable identification for proving residency. You may also require a passport photo and a photocopy of your PAN card. Keep in mind that you might not always be asked to provide documents such as a PAN card, a copy of your passport, a passport photo, or proof of your current address. This varies across financial institutions and depends on whether or not the bank has received your Know Your Customer (KYC) paperwork in connection with your savings account. Completing the application form Selecting a bank is the next step after settling on a card type and gathering the necessary documentation. You can apply for a credit card at the majority of the major Indian banks even if you don’t have an account there. A ‘credit cards’ section will be on the bank’s official website. By entering their existing customer ID and password into the site, clients can apply for a credit card online. Most financial institutions need new customers to provide personal information after they visit the “credit cards” page. A bank representative will contact the consumer when they enter those details to submit KYC and obtain help with the credit card application procedure. You can always stroll up to the nearest branch if you do not wish to apply for a credit card online. However, given that you live in a technological society, you can also conduct credit card bill payments online. Credit cards come in many varieties, from those designed specifically for travellers to those targeted towards students. Pick a mode of payment When applying for a free credit card, it’s important to consider how you’d like to pay your bills. Most financial institutions still permit consumers to physically visit a branch and pay with cash for credit card bills. A nominal service charge might be tacked on in such a scenario. The ATMs typically have drop boxes where you can deposit a check along with your credit card information. A payment made by check will be cleared in three business days, so be sure to send your money at least that much time in advance. You may usually pay most lenders with your credit card through the NEFT function of any bank. When making an online NEFT payment, the payee account number is where you digitally enter your credit card information. Unlike other payment methods, which may take up to two business days to be paid, payments made through this method are credited the same business day they are received if they are made during regular business hours. While applying for a free credit card, knowing exactly how you’ll pay your bills might save you time and hassle later on. Benefits of a Free Credit Card Convenience If you can spend with a tap of your card, there’s no reason to lug about a big wad of cash. Presenting plastic in the form of a credit card instead of fiddling with cash or checks is a huge time saver. If you have a digital wallet, you can attach your card to it and use it to make payments without ever taking it out of your wallet. Interest-Free Credit Interest fees are waived when using a credit card for the first few billing cycles after making a transaction (perhaps as long as 50 days). The term “buy now, pay later” could not be more appropriate. Rewards To accumulate rewards, use your free credit card for all of your purchases. These points can be redeemed for intriguing merchandise, gift cards, and even free airline tickets. Discounts and Cashbacks Your fee credit card grants you access to a wide variety of cashback offers and reward points, particularly at a curated collection of offline and online retailers, including waiving fuel surcharge fees and exclusive online discounts. [B-02] Conclusion Keep in mind that different credit cards from different banks provide different perks. The credit card comes with a selection of promotions from which you may pick to gain cashback or instant discounts. There is little time between completing the application and receiving your credit card in the mail. Looking for an instant personal loan? Apply for a personal loan with Piramal Finance and get instant funds!

08-11-2023

Know More

List of all housing Scheme in India

The Indian Government and its subordinates make it easy for you to own a house. A government housing scheme saves you a lot of money while purchasing real estate and provides you with a house for a lower rate. You may visit the Indian banks or HFCs and register for the housing schemes provided by the government. Look into a few of the government housing programs to find out how much less you can pay than the going rate for a property in India. PMAY, or Pradhan Mantri Awas Yojana The PMAY was created to help economically disadvantaged members of society. This comprises economically disadvantaged, middle-income, and low-income people (LIG). It aims to make homeownership more accessible to them. This approach may save INR 2.67 lakh on your home loan interest. You must first qualify as a creditor to take advantage of the program’s benefits. What is the difference between receiving benefits in an urban or rural setting? Urban: Individuals who fall under the Low Income Group, or LIG, with annual household incomes ranging from 3 lakh to 6 lakh INR EWS (Economically Weaker Section) with an annual income of up to 3 lakh INR Under the Middle Income Group, or MIG 1, a person who earns up to Rs 12 lakh annually is qualified for a 4% loan subsidy for loans up to INR 9 lakh. The maximum subsidy offered by CLSS is INR 2.35 lakh. According to the Middle Income Group, or MIG 1, a person earning up to INR 18 lakh can get a 3% subsidy. This subsidy is applied to a loan of up to INR 12 lakh. CLSS provides a maximum subsidy of INR 2.30 lakh. For different sections, the interest subsidy on the PMAY scheme is: 6.40% for the Economically Weaker Section 6.40% for low-income groups 4.00% for Middle Income Group 1 3.00% for Middle Income Group 2 Rural: The Gram Sabha itself will decide who gets what. They decide who is qualified based on data gathered at the federal level. They compile a list of the socially and economically marginalised groups in the country. The recipients’ list is then divided into groups according to the PMAY rural program. If the applicant’s name appears on the Gram Sabha’s publicly accessible list, they are eligible to apply for a house loan via the PMAY rural program. The Scheme of the Maharashtra Housing and Area Development Authority A fixed number of residences have been reserved for the scheme. They are distributed based on each applicant’s income. You can apply for a house loan under the program if you are a Maharashtra resident with a valid domicile certificate. You must be at least 18 years old, possess a PAN card, and have a consistent source of income. The income categories for flats are: Lower Income Groups (LIG), for people earning between INR 25,001 and 50,000 per month .Middle-Income Groups (MIG), for people who earn between INR 50,001 and 75,000 per month. High-Income Groups (HIG), for people who make more than INR 75,000 per month. How Do You Apply? Go to the Maharashtra Housing and Area Development Authority’s website. Fill out the application and choose your income level and lottery scheme. Then, print your application acknowledgment form and submit your online lottery registration payment. You can apply for the PMAY scheme if you wish to boost your property's affordability. The following documents must be submitted: ID card, Aadhaar certificate of domicile the voter ID card birth registration a driving licence a diploma from a school Card PAN Passport The DDA Housing Scheme Residents of Delhi are provided with schemes to afford a house of their own based on their income, like in other states. The DDA programme was initiated in March 2019. It offers five thousand flats in some parts of South Delhi. These parts include Vasant Kunj, Rohini Sector 34, and Kalkaji. If you are of Indian origin and over the age of 18, you may apply for this scheme. You should belong to one of the categories among LIG, EWS, MIG, and HIG. There are different banks listed on the DDA website. You can submit your application for this scheme at one of those banks. Enter the DDA website, complete the application form, and then make payment. Different registration fees apply depending on your category. For different categories of flats, the registration fee is listed below: For HIG flats, the fee is INR 2 lakh. For MIG flats, the fee is INR 2 lakh. For LIG flats, the fee is INR 1 lakh. For 1 BHK Flats, the fee is INR 15,000 For Janta Flats, the fee is INR 10,000. For EWS-reserved flats, the fee is INR 25,000. If you prevail at the draw, you can quickly take ownership of the apartment. To complete the necessary formalities, you can submit documents like your PAN card, Aadhaar card, voter’s ID card, bank statements, and ITR report. NTR Urban Housing Scheme The NTR Housing Scheme was initiated in 2016. It aims to assist underprivileged sections of Andhra Pradesh. They can take advantage of this by purchasing affordable housing. In 2018–19, the Andhra Pradesh government distributed 15,091 houses through the Pradhan Mantri Awas Yojana (PMAY) and NTR (Urban) Nagar schemes. Any resident of Andhra Pradesh not availing of a government-funded housing scheme can take advantage of this scheme. They are eligible to apply for this housing scheme. You must hold a valid BPL or white ration card if you wish to apply for this housing plan. Under this program, you’ll get a subsidy of INR 2.5 lakh. In addition, if you are an SC or ST beneficiary, you will receive an additional INR 50,000. Haryana Housing Board Housing Scheme This scheme aims to help the sections of society that are weak economically. This plan offers freehold residential and commercial building lots for allotment and construction within the state. You must enter a lottery according to the conditions and deadlines to benefit from the housing program. You must pay a participation fee. Your family’s annual income cannot exceed INR 3 lakh. You will have access to a freehold plot if you win the drawing. Kerala Housing Board housing scheme The Kerala State Housing Board was established in 1971. The board implemented various housing construction and home loan schemes designed to assist the economically disadvantaged in meeting their housing needs. Go to their official website to learn more about the Kerala Housing Board housing scheme. [B-02] Summing Up The government implements various government housing schemes to assist citizens. These schemes provide many subsidies and financial assistance to citizens, which can aid them in purchasing their first home. Different states have different criteria for selecting the beneficiaries of the scheme. To read in-depth, you should go to their official website. Take advice from professionals like Piramal Finance to better understand the eligibility criteria and compare the different home loan offers so that you can make an informed decision.

08-11-2023

Personal Loan

Benefits of Taking a Loan to Buy a Tractor in India

Tractor loans for farmers are the industry standard for agricultural machinery in India. Tractor finance in business and industries is a need. Hence, top banks offer tractor loans. The demand for tractor finance is highest in the country’s rural and semi-urban areas. Tractor loans help you buy new or old tractors. These tractors have a wide range of applications in industry and agriculture. Farmers must have at least three acres of land to qualify for a tractor loan. But, this number varies lender by lender. This article will highlight some benefits of applying for a tractor loan for farmers in India. [B-01] Benefits of Taking Out a Tractor Loan in India Better productivity A tractor can make you more productive. And, due to the increased productivity, you will have more time to devote to each task. Also, a tractor outfitted with a cultivator, rotavator, sprayer, and thresher is handy. It makes farming far more efficient than using farm animals. It also speeds up the process. Hence, you can make the most of your time. Cut the cost of production The level of automation in a farm directly impacts crop harvest. Investing in a tractor can save 15–20% on seed and fertilizer costs. That’s because of the increased accuracy it provides. You’ll feel confident about farming again. That’s because tractors make tillage, sowing, inter-row crop cultivation, and harvesting easier. Together, these factors allow for a higher level of cropping intensity. Which, in turn, yields greater yields. Hence, we recommend applying for a tractor loan. Finally, it can help you cut down on production costs. Increase land cultivability Farmers in hilly areas know how labour-intensive it is to cultivate their produce. They frequently give up and give in. A piece of farm automation equipment, like a tractor, can be quite helpful in this situation. The innovative techniques used by tractors save time and effort. Hence, they allow you to transform the unusable area into productive farmland. And, help you to increase your earnings during harvests. Comfortable A tractor is very comfortable and convenient. And, due to the robust hydraulics, they can lift harvests weighing up to 1500 kgs. Also, investing in a tractor can make large-scale fieldwork much easier. Make your selection from the available options There is a diverse selection of tractors available. You can choose from over 16 a handful of national and international brands. So, it doesn’t matter if you have a tiny orchard or a sprawling farm; you have options. You won’t be disappointed if you buy a tractor with a tractor loan. Suppose you’re looking to improve your output on the farm. In that case, a tractor is your best bet. Important Things to Think About When Applying for a Tractor Loan There are several things to think about before applying for a tractor loan. Interest Rate The interest rate charged by the lender is a primary factor. The APR on tractor loans can be anything between 10.55 and 23.95 %. The interest rate is determined by the lender based on several factors. For example, the loan amount, the loan term, and others. Borrowing money at a low-interest rate will reduce your monthly outlay. Tenure The longest possible loan period for tractors is 7 years. In contrast, some lenders only allow a maximum payback time of 5 years. Suppose you choose a shorter repayment period. In that case, you will pay less interest. But, your monthly EMI payments will be higher. To that end, you should think about the following: How long can you afford to pay the loan back How long will the lender let you have the loan Repayment period Extra Costs Various costs can be added to your loan amount. For example: Processing fees Prepayment fees Documentation charges Thus, look for a loan with a good interest rate and consider the costs involved. Collateral The lender you choose to borrow from will determine if the collateral is required. Thus, it is important to read the fine print before giving a loan the green light. Margin When applying for a tractor loan, verify the margin your lender has offered. The average loan amount offered by lenders is 90% of the price of the tractor. Hence, you must pay the remaining 10%. If the lender gives a higher margin, you should ensure that you have the funds to make timely payments. Loan Rates for Tractors Tractor loan interest rates in India can vary widely based on certain criteria. For example: Type of loan The creditor The individual’s credit score The amount of the down payment But generally speaking, the interest rate for a tractor loan is around 10% to 12%. In India, you can take out tractor loans for short or long periods. Loans with terms longer than 3 years are long-term. In contrast, those with less than 3 are short-term. The lending institution sets the interest rate for tractor loans in India. But, interest rates offered to vary from lender to lender. The applicant’s credit rating also plays a significant role in the interest rate. Interest rates are inversely proportional to credit scores. So, the higher the credit score, the lower the interest. Last but not least, the interest rate on tractor loans also depends on the down payment. When the down payment is high, the interest is low. And, when the down payment is low, the interest is high. [B-02] Conclusion Borrowing money is typically the only option for Indian farmers who want to buy a tractor. In this article, we discussed tractor loans for farmers in detail. Using this data, securing the loan necessary to buy your dream tractor should be much simpler. Want an instant personal loan? Apply for a personal loan with Piramal Finance right now!

08-11-2023

Know More

Everything You Need To Know About Convertible Debentures

Convertible debentures are long-term debt instruments. Firms issue convertible debentures. It has one unique feature. They can be converted into equity shares. Shareholders can convert debentures into equity shares. This conversion gives security to the holder. And this security can balance the risk of investing in unsecured debt. The issuer often holds conversion rights. A debenture can be converted into stock or shares only after a certain decided time. Note that Non-convertible debentures can’t be changed into equity or shares. [B-01] What are Convertible Debentures Convertible debentures are unsecured loans or bonds. Often, there is no collateral as security. Firms issue long-term debentures to take advantage of tax benefits. They are issued as fixed-rate loans. The bondholder gets fixed interest based on a schedule. Let us take an example. A company that has issued convertible debentures can claim tax deductions for interest paid to investors. These can be fully, partially, or optionally convertible. The interest rate on convertible debentures is low. This is because it can be changed into stock for the investor’s benefit. Difference Between Convertible and Non-Convertible Debentures FactorsConvertible DebenturesNon-Convertible DebenturesRate of InterestThe rate of interest is lower. This is because convertible debentures can be converted into shares or equity.The rate of interest is higher. This is because non-convertible debentures cannot be converted into stock.Maturity ValueThe maturity value depends on the stock price of the company. If the stock price goes high, it can lead to poor returns.Non-convertible debentures have a fixed and decided value by the coupon rate. The returns are fixed for every quarter, biannually, or annually until maturity.Impact of Market ConditionsConvertible debentures can be converted into equity stocks during unstable market conditions.Non-convertible debentures cannot be converted at any time. Non-convertible debenture holders have to wait until maturity for redemption.StatusConvertible debenture holders can be creditors or shareholders in the company.Non-convertible debenture holders are always creditors or lenders.RiskThere is a lower risk* in convertible debentures.There is a higher risk^ in non-convertible debentures. * This is because the investor can convert them into shares. ^ This is because investors have to wait until maturity to redeem the value. Types of Convertible Debentures Convertible debentures are wholly or partially convertible. Fully Convertible Debentures The entire value can be changed to match the equity shares of the company. The conversion of these debentures leads to higher equity capital. These have a highly favourable debt-to-equity ratio. They are classed as equity or stock. The conversion ratio is decided at the time of issuing. This is good for companies that do not yet have a good track record that is well known. This is popular among investors. Partly Convertible Debentures Only a part can be converted into equity. They have a favourable debt-to-equity ratio. The convertible part is classed as equity. The non-convertible part is classed as debt. The conversion ratio is checked when the securities are issued. Conversion leads to lower equity capital. This is best for those companies that have a good track record. This is not as common among investors. Features of Convertible Debentures These are some common features of convertible debentures. Conversion Price The conversion price is the price at which a usual share is issued. These are then assigned to the holders. This price depends on various factors. This includes market price, current book value, and the expected rise in share value. A higher conversion price means lower inclusion to the capital base. Conversion Rate This shows the number of equity shares acquired in place of a convertible bond. Quantum of Conversion This is the number of debentures that has to be converted. It is shown as a percentage of the face value. Coupon Payment The value of a coupon payment depends on the issuer’s credit quality and interest rate. A study of the “break-even point” is useful to distinguish coupon payouts from dividend yields of common shares. Convertible Value The value is set on an investor’s right to receive equity shares. This value is received by multiplying the conversion ratio by the market price of each equity share. Conversion Timing The time ranges from one year (from the date when allotted) to five years. Market Price The market price depends on the investment and conversion value. The market price is the value that the market associates with a convertible debenture. Premium This is the difference between the current stock price and the conversion price. Benefits of Convertible Debentures From the point of view of business, convertible debentures are a quick and easy way of raising funds. These funds can speed up the growth and profit of a company.These are some of the benefits of convertible debentures. Convertible debentures have a fixed rate. There is also the option to take part in the rise of stock prices. If the price of the issuer’s stock decreases, investors can retain the bonds until maturity. Convertible debenture holders are paid before other stockholders at the time of liquidation of the company. This is a hybrid investment option. Investors receive fixed-interest payouts. They can choose to convert their loan to equity too. This is done when the stock prices are high or when the company is performing well. Limitations of Convertible Debentures Just like any other investment, there are also limitations. These are some disadvantages of convertible debentures. Convertible debenture holders obtain a lower interest rate than other bonds. The company’s actions may affect convertible debenture holders. In such cases, the company may not be able to repay the principal amount to the investors. If the stock price decreases after the conversion into equity, investors may suffer losses in their investments. [B-02] Conclusion Convertible debentures attract investors because they have fixed interest payments. If the share prices of the firm rise, the investors benefit. This is because of the pre-set conversion terms. Investors can then buy shares at a discount with conversion. This depends on the terms of the contract. If the share price goes down, they can keep the security as a bond. In this case, they can earn higher interest than if they had bought traditional bonds.

08-11-2023

Know More

Things You Should Know About PPF Accounts in India

One of the most common retirement savings methods, the Public Provident Fund (PPF) offers a restricted set of risk-free investment options. The current annual interest rate for PPF accounts is 7.10 per cent. PPF, on the other hand, is an entire debt instrument, and most investors are unaware of its characteristics. When it comes to retirement savings, a PPF post office account offers an excellent balance of security, returns, and tax advantages. You can also apply for post office PPF online. In this article, we will talk about PPF accounts and more. So, let us get started. [B-01] 12 Things to Know About a PPF Account in India If you are considering purchasing PPF, here are 12 things you should know: 1. Safe Investments Due to Government Backing You can avoid the stress of stock market fluctuations by putting money into a personal retirement fund. The government of India determines and provides the interest rate for the PPF pension. With this guarantee from the government, PPF is a secured investment choice for any Indian citizen. 2. Variable Rate of Returns but Assured Returns As a long-term investment, the PPF is a good bet because its returns are better than those of most other fixed-income plans. In addition, the government periodically adjusts the interest rate, and the current quarterly return on PPF is 7.1%. If the present PPF interest rate of 7.1% holds constant over time, a person can easily amass a sizeable retirement money of over 1 crore by the time he retires. 3. Allowed to Make a Partial Withdrawal After the account has been open for at least six years, the owner should be able to withdraw money. The account must be at least six years old before you can remove more than half of the total balance. The remaining balance is kept in the PPF. As of the sixth fiscal year following the creation of the PPF account, partial withdrawals are permitted. 4. PPF Lock-in Period To get the most out of your PPF investment, you should have a long-term investment horizon. Five years of regular payments must be made into the account before any withdrawals are permitted. The plan matures after 15 years. After the first 15-year commitment period ends, however, investors have the option of extending the lease indefinitely in 5-year increments. 5. Tax Benefits Income tax implications for PPF are EEE (Exempt-Exempt-Exempt). As a result, under Section 80C of the Income Tax Act, you can claim a tax break on PPF payments of up to Rs. 1.5 lakh. Second, the interest accrued on the principal and the principal upon maturity is tax-free. In some cases, this may be sufficient to convince an individual to select PPF. 6. Time Your Deposits Wisely to Maximize Your Returns Interest accrued on a PPF balance is added to the account once a year on the last day of the fiscal year. However, interest is based on the 5-day rolling average of the account amount, rather than the final value at the end of the month. Therefore, you should make a PPF contribution on or before the 5th of each month. 7. Earn the Most From Your PPF PPF has the potential for high profits for investors. To accomplish this, you can put away Rs. 1.5 lakh all at once at the beginning of the fiscal year. Interest on a PPF account is computed on a fiscal year basis (April–March). The best time to put money into the account, then, is on or before April 5th of each year. A single investment like this will yield interest for a whole year. 8. The Best Investment for a Kid’s Future A parent or legal guardian can set up a PPF account in a minor’s name. When it matures, after 15 years, and after the minor reaches 18, the money in it is free of taxes and can be used for the child’s future needs, education costs, etc. 9. Funds in Your PPF account Can Be Used as Collateral for a Loan One more of PPF’s many advantages. You can get a loan against your PPF balance if you find yourself in a bind. The loan option is, however, only offered to you between the third and sixth fiscal years after you start your account. Furthermore, the closing of the first loan is required before the second loan may be secured. 10. Without Contributions, the PPF Is Inactive One must invest at least Rs. 500 each year to qualify as a regular investor. Every calendar year, you can put up to Rs. 1.5 million into your PPF account. The account will expire if the investor doesn’t put in at least the bare minimum each year. If the account has been dormant for more than a year, you can get it back into use by sending a written request and the appropriate fee (currently Rs. 50 per year). 11. Profiting on One’s Spouse’s Earnings You can get more out of your PPF account if you set it up in your spouse’s name. To comply with Indian tax regulations, any money given to a spouse as a gift and subsequently invested will be considered part of that person’s taxable income. You won’t have to worry about increasing your tax bill if you put money into a PPF account. This means you can take advantage of the PPF scheme by investing up to Rs. 1.5 million every year. 12. Make a PPF Contribution on or Before the 5th of Every Month If you want to increase your monthly earnings, you must make your PPF deposit before the 5th of every month. The next optimal opportunity to make a PPF deposit is between April 1 and April 5. Once each month, your PPF account will be updated with your accrued interest. Instead, interest is added to the PPF account after the fiscal year. [B-02] Conclusion The Public Provident Fund (PPF) is a good option for anyone who wants to put their money in a government-backed investment program over the long term. This is a great scheme for those who don’t qualify for the EPF, such as the self-employed and small business owners. The Public Provident Fund is another option for people who want to begin saving and take advantage of tax-free investing gains. Want instant funds? Apply for a personal loan with Piramal Finance and get up to Rs. 10 Lakhs.

08-11-2023

Schemes

How Does the Pradhan Mantri Awas Yojana Work in India?

PMAY, generally recognized as Pradhan Mantri Awas Yojana, is an initiative by the government of India to provide affordable housing. This scheme has been specially developed to help the urban poor. This scheme falls under a “credit-linked subsidy scheme” (CLSS) that targets the middle-income group as its beneficiaries. The interest rate for PMAY is 6.50% per annum, which can be repaid over 20 years. This scheme was first introduced on June 25, 2015, but it has now been extended until December 31, 2024. Although this scheme aimed to provide houses to everyone on the beneficiary list by March 2022. There is also a Pradhan Mantri Awas Yojana—Gramin (PMAY-G) named the Indira Awas Yojana earlier. This scheme was started in 2016 with the main objective of developing housing units for beneficiaries in rural regions. This scheme is available across the nation except for Delhi and Chandigarh. In this category of PMAY, the central government and the respective state governments will share the expense of making these house units. The ratio for the plain region is 60:40 for the plain and 90:10 for the northeastern and hilly regions. Features of PMAY One of its highlights is that if you are a senior citizen or a differently abled person, you will be assigned to the scheme’s ground floors. In the Pradhan Mantri Awas Yojana, the government provides a subsidy rate of 6.50% p.a. on a 20-year housing loan. The PMAY scheme in India covers urban areas. These comprise 500 class 1 cities and 4000+ statutory towns. The initial plan was to implement this scheme in three phases. In PMAY, the government emphasized using sustainable development principles, eco-friendly technologies, and modern development mechanisms. This scheme is only for those who don’t have their own home. If you own a house, then you will not be eligible to apply for PMAY. Although you can use this scheme even if you already own a home, if you want to upgrade to a Pucca house, Categories of Subsidies on Pradhan Mantri Awas Yojana This scheme has been developed by considering the earnings of the various segments of the country. Accordingly, the beneficiaries of PAMY are divided into four segments. Economically Weaker Section (EWS) – Annual income of less than ₹3 lakhs This category in PMAY can benefit up to 6 lakhs with an interest subsidy of 6.50%. If your family is in the category of the EWS section, then you can buy a house with a maximum of 30 square meters of carpet area. Lower Income Group (LIG) – Annual income of ₹3 to ₹6 lakhs. In the lower income category, families can avail of a loan up to Rs. 6 lakhs with a 6.50% p.a. subsidy on the interest rate. In this category, your family can also purchase a house with a maximum carpet area of 30 square meters. Middle Income Group 1 (MIG 1) – Annual income of ₹6 -₹12 lakhs. Under the Pradhan Mantri Awas Yojana, families in the middle-income category (Category 1) may get a loan of up to Rs. 9 lakhs, on which there is an interest subsidy of 4.00% p.a. If your family falls under the MIG 1 category, you can purchase a house with a maximum carpet area of 160 square meters. Middle Income Group 2 (MIG 2) – Annual income of ₹12 – ₹18 lakhs. Under Pradhan Mantri Jan Awas Yojana, the middle-income group category II, your family may get a loan of up to 9 lakhs, on which there is an interest subsidy of 3.00% p.a. If your family falls under the MIG 2 category, then you can purchase a house with a maximum carpet area of 200 square meters. How Does PMAY Work? The Pradhan Mantri Awas Yojana benefits can be availed if you want to buy a new house from a developer and acquire a house from the secondary market. You can also take out loans under this scheme to upgrade your kaccha houses to pucca houses. For example, assume you fall under MIG category 2 and your family wants to buy a house for ₹ 60 lakh. In the usual scenario, you will have to make the mandatory minimum down payment of 20 percent, i.e., ₹12 lakh, and take a loan for the remaining ₹48 lakh. Whereas under the Pradhan Mantri Awas Yojana, you will get a subsidy of 3 percent up to ₹12 lakh, so the home loan interest rate will be applicable only on the remaining ₹36 lakh. How do I apply for the Pradhan Mantri Awas Yojana? There are several options for applying for PMAY, such as Pradhan Mantri Awas Yojana Gramin online. There aren’t many complications involved in applying for this scheme. The application process for PMAY is very easy, and the interface for the online portal is also very user-friendly. You only require a few documents to apply for this scheme, such as your Aadhar card number, PAN card, etc. As soon as you open the portal, all you need to do is open the screen and follow the directions. Fill out the application per the instructions, and you will be eligible for the PMAY scheme. [B-02] Conclusion Everybody deserves to live under a good, safe roof they can call home. The government has been trying to help people buy their dream homes. This is why they started the credit-linked scheme for people who couldn’t afford to buy homes alone. This scheme has been really helpful in eliminating poverty and homelessness in India. The government’s efforts should always be complemented by those of private companies.

08-11-2023

Gold Loan

Which Company Provides a Gold Loan Instantly?

You can get an instant gold loan anywhere in India if you need urgent cash. This is a secured loan you can get by pledging your gold ornaments or coins. The gold that is pledged must be 18 to 24 karats in fineness. You can get up to 75% of the market value of the gold that you have pledged, depending on its quality. The paperwork is minimal, and the process is quicker than other loans. A few companies that you can approach for an instant gold loan include: [B-01] Non-Banking Finance Companies (NBFCs) These are financial organisations that provide almost all the services that banks offer. However, they don’t have banking licenses. Nevertheless, these registered businesses carry out lending activities per the rules of the RBI. A few well-known NBFCs when it comes to providing gold loans are: Muthoot Finance: Muthoot Finance is one of the biggest names in gold financing. With about 4265 branches spread across India, they provide gold loans at interest rates starting at 11.9% p.a. The maximum payback period is 36 months, which can be extended with consent. A simple loan application procedure and minimum paperwork can help you get a loan of up to INR 1 crore within 5 minutes. Manappuram Gold: Another well-known name in gold financing is Manappuram Gold, with about 3200 locations across India. They have a variety of programmes for people of all income levels. The interest rate starts at 12% p.a., and they have a maximum payback period of 12 months (extendable with consent). The maximum loan amount you can get from Manappuram Gold is INR 1 crore (disbursed within 5 minutes). Banks Banks have public deposits that they use to provide loans to borrowers. With a banking license, banks are authorised to provide various financial services, including gold loans. They strictly adhere to the rules established by the RBI. The interest rates and terms might vary from one lender to the next when applying for an instant gold loan. A few banks that you can approach to get a gold loan instantly include: Union Bank: Union Bank of India has a gold loan programme called the Union Gold Loan to help people in need gain access to instant money. The gold you pledge must be bought from a bank if you need to apply for an instant gold loan here. You can get INR 1800 for each gramme of 22-karat gold you pledge here. The total amount that can be borrowed is INR 20 lakhs. The interest rate is around 7% p.a. (MCLR + 2.65%) with 1% processing charges. The maximum payback period is 12 months. SBI: The most significant public sector bank with a sizeable branch network in India, SBI offers its gold loan programme for people who need instant cash. This program can help you get a maximum amount of INR 50 lakhs at an interest rate starting from 7.5% p.a. The maximum payback period is 36 months, and the processing charges come to 0.5% of the total loan amount. Kotak Mahindra: Its gold loan is available for one to four years if you have a pressing need for cash. You can pledge bank-minted coins (up to 50 g) and gold jewellery of 18 to 22 karat fineness. The maximum loan amount you can get is INR 25 lakh if you are a new customer. Existing customers are eligible for up to INR 50 lakhs. The interest rates start at 10.5% p.a. with processing charges of 2%. ICICI: The ICICI Bank also has its gold loan program with an approval procedure of 30 to 60 minutes. You can get an instant gold loan of up to INR 1 crore that you need to pay back within a year. The interest rates start at 10% p.a. with 1% processing fees. There are also documentation charges of INR 199. HDFC Bank: The Sampoorna Bharosa Gold Loan Program of HDFC is an excellent instant gold loan to apply for if you need urgent cash with minimum paperwork. The interest rate starts at 9.9% p.a. with processing fees of 1.5% (plus taxes). The maximum payback period is 24 months, and the minimum loan amount is INR 25,000 (INR 10,000 for rural residents). AXIS Bank: Axis Bank offers cheap gold loans at interest rates starting at 13% p.a. The maximum payback period is 36 months, and the total amount you can get is INR 25 lakhs. The processing charges total up to 1% of the loan amount. You can only pledge gold coins and jewellery sold to you by banks. Central Bank of India: You can borrow money equivalent to 50 grammes of gold against the Cent Personal Gold Loan program. You can get up to INR 1750 for every gramme of gold you pledge, depending on the quality. Interest rates start at 9.05% p.a., and the maximum payback period is 12 months. The processing charges total up to 0.5% of your loan amount. Federal Bank Gold Loan: You can get an instant gold loan up to INR 1.5 crores from Federal Bank, for interest rates as low as 8.5% p.a. The maximum payback period is 12 months, which is adjustable. You can choose to repay as a lump sum or in the form of an EMI. Only 22-karat gold ornaments are eligible for pledging. [B-02] Summing up Make sure your gold will be safe with the company before pledging it for an instant gold loan. Compare the interest rates, processing charges, repayment options, and other terms of the various lenders before you decide on one to get a gold loan instantly. If you need a personal loan without pledging gold, visit the website of Piramal Finance.

08-11-2023