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Tax Savings

Top Tax Saving Mutual Fund in India 2022

Tax Saving Mutual funds or ELSS offer higher returns compared to regular saving schemes. You get to save Income tax under section 80 C of the IT act by investing in ELSS. Get a maximum amount of 1.5 lakhs tax deduction by investing in an ELSS tax-saving mutual fund and avail of the benefits of the shortest lock-in period. Before you go ahead and invest your funds in ELSS tax-saving mutual funds, get familiarized with ELSS. ELSS investments are made in stock. They, therefore, carry higher risks. They don’t offer guaranteed returns like usual investment schemes. However, it’s no secret that stocks offer higher returns over a longer time. Hence, ELSS tax-saving instruments have the potential to earn better returns. Further, ELSS offer the shortest lock-in period of as low as 3 years. Investments covered under 80C have lock-in periods of 10-15 years. ELSS with a cap of 5-7 years offers beautiful returns. [B-01] Everyone should make use of the tax deduction scheme by investing in ELSS tax-saving mutual funds. The beautiful thing about today’s informative world is that you can benefit from people’s knowledge. You don’t need to be a pro-investor to pick safe rewarding investment tools. Choose and invest amongst these 7 best-performing tax-saving mutual funds and reap bounty benefits from them. Quant Tax Plan Quant Tax plan is an ELSS mutual fund scheme by Quant Mutual Funds. It has been successfully offering maximum returns ever since its launch in 2013. A major part of the fund is invested in energy, material sectors, consumer staples, financial segments and services. It tracks the NIFTY500 total return index and has doubled the invested money in it every 2 years. Quant tax direct plan has a fund size of 2127 Crores. Its top holdings include Ambuja Cements, State Bank of India, ITC Ltd, Adani Ports, Reliance Industries Ltd and others. Ever since its launch, the direct plan has offered 21.94% average annual returns. Mirae Asset Tax saver fund Mirae Tax Saver fund has been in the market for more than 6 years and has Rs 13546 crores of assets under management. It has stood true to investors’ expectations with its consistent returns. The central focus of investment is majorly in the healthcare, automobile and technology sectors. The major holdings of the fund lie in HDFC Bank Ltd, ICICI Bank Ltd, Reliance Industry, Axis Bank, Infosys Ltd and others. Mirae Asset Tax Saver fund offers 19.79% average annual returns ever since its launch. HDFC Tax Saver Fund HDFC Tax saver fund is a rewarding ELSS tax-saving mutual fund from HDFC Mutual Funds. It has a fund size of Rs. 10,066 Crore under Asset Management and its top holdings are Hindustan Aeronautics, Bharti Airtel Ltd, ICICI Bank Ltd, HDFC Bank Ltd and State Bank of India. The investments are major in the healthcare, energy, and automobile sectors along with the financial and technology sectors. HDFC Tax saver fund was launched in 2013 and offers 13.63% average annual returns consistently. IDFC Tax Advantage fund IDFC Tax Advantage direct-plan is in the market for more than 9 years. It is an ELSS Tax saving instrument part of IDFC Mutual fund plans. It has Rs 3986 crores of fund assets under management with its top holdings in Reliance Ltd, Infosys Ltd, State Bank of India, HDFC Bank and ICICI Bank. The materials, technology and healthcare sectors are prominent investment sectors by this tax saving fund and have a slight inclination towards automobile and financial sectors. IDFC Tax Advantage fund has offered 17.96% average annual returns since its launch time. Canara Robeco Equity Tax saver fund Canara Robeco Equity tax saver fund is as old as other ELSS tax saving tools. It was launched back in 2013 and ever since then, it has Rs 4407 Crore of Assets under management. The fund invests primarily in the automobile, capital goods, and healthcare sectors; however, the technology and financial sectors are less explored. The top holding of funds is in ICICI Bank Ltd, HDFC Bank Ltd, Axis Bank Ltd, Infosys Ltd and reliance Ltd. Canara Robeco tax saver fund offers 15.91% average annual returns and is above average at coping with losses in a falling market. Tata India Tax Saving Fund Tata India Tax Saving fund is an ELSS Tax Saving mutual fund scheme by TATA Mutual fund. It was launched in 2014 and since then it manages assets worth Rs 3191 crore under management. The ELSS fund holds major holdings in ICICI Bank, HDFC Bank, Infosys, State Bank of India and Reliance Ltd. The major investments of the fund are in Capital goods, energy and healthcare sectors. It can sail par in a falling market and is a good ELSS tax-saving mutual fund. The Tata India Tax Saving fund has consistently delivered 17.21% average annual returns. Axis Long-term Equity Fund Axis Long term equity fund is a part of Axis mutual funds ELSS Tax saving plan. It has Rs 31,624 crore of assets under management with its major investments in chemical, technology and healthcare sectors. The major holdings of the fund lie in Bajaj Finance, Avenue Supermarts, Kotak Mahindra, Tata Consultancy and Nestle India. Axis Long term Equity fund is comparatively less consistent when it comes to regular returns. It offers 17.58% average annual returns with a low coping mechanism in a falling market. [B-02] The following ELSS tax-saving mutual funds are selected based on 5 parameters. These parameters are consistency, downside risk, asset size, outperformance and mean rolling returns. These tax saving instruments offer generous returns compared to regular saving schemes like 5 years fixed deposits, PPF, NSC and others. Whether you are an avid investor or someone who wants to build safe saving instruments, ELSS tax saving tools should be on your investment list. Avail the advantage of tax deduction up to 1.5 lakhs today by investing in ELSS tax-saving mutual funds. Head to Piramal Finance and get quick financial reads to help you invest better. If you are looking to avail of personal loans, click here.

08-11-2023

Personal Loan

What is the processing fee for a personal loan: All you need to know

A personal loan may be a valuable financial tool for meeting expenses, but it includes expenses other than interest. Lenders add several fees on top of the principal amount of personal loans, including a processing fee for a personal loan. It’s important to figure out whether you can afford a loan before applying for one. Therefore, consider all the costs involved with a loan before applying, whether online or via a personal loan app. Let’s look at a processing fee for a personal loan and why a personal loan app would charge it. [B-01] How much does it cost to process something? The processing fee for a personal loan is money paid up ahead by the borrower to the lender to cover the expenses of processing a loan. The price is spelled out in the loan document. Examples include administrative expenses, document processing charges, credit check fees, etc. Lenders incur costs for administrative fees associated with processing and approving loans. They also determine the amount of the loan that will go toward the borrower’s processing fees. Various factors, including loan type, borrower credit, and loan amount, may affect the processing fee. What is the maximum fee that a lender may pay for your loan? Lenders are free to charge whatever amount they see fit for processing costs. Nonetheless, the law requires that all expenses associated with a personal loan be disclosed and not discriminatory, even if there is no specific regulation to that effect. Depending on their circumstances, lenders may charge processing fees ranging from zero to several hundred dollars. Before applying for a personal loan, whether online or offline using an instant personal loan app, discuss the processing fees with the lender. It would help if you also were looking for hidden processing fees levied under other names. Lenders can split the processing cost into two equal parts: a one-time login fee and the balance required upon loan closing or distribution. What type of cost is typical for a personal loan’s processing? Personal loan charges are often low, ranging from 1-6% of the total loan amount. Generally, the fee ranges between 0.5%-2.5% of the total loan amount. For loans of lesser sums, banks sometimes charge a disproportionately high percentage of the processing cost. In addition, they often provide lower processing fees for greater loan amounts. However, internet lenders charge much smaller processing costs of about two percent to four percent of the loan amount, or five hundred dollars, whichever is greater. The question is whether or not the processing fees are covered. Once processed, fees are often non-refundable. Sometimes those who applied for loans had their requests turned down. Despite having their applications rejected, they were still required to pay a processing fee. Borrowers are sometimes expected to cover the costs lenders expend to check borrowers’ credit histories, assess their trustworthiness, and perform various other administrative duties. Options for paying Transaction Fees Lenders may levy processing fees in various forms. While some lenders deduct the processing charge from the loan amount before disbursement, others deduct it from the check you write to them the moment your loan is approved. The lender may require prepayment of or deduct the processing fees from the loan amount before making a distribution. Be wary if the lender attempts to upsell you on anything outside the loan, such as insurance or a credit fitness report. It’s great to compare the rates and fees offered by several lenders for the same loan amount. How much do processing fees and other requirements from banks and online lenders typically cost? The lender will charge you a processing fee when you apply for a loan. The application process and the associated fees might vary across financial institutions. Your bank may demand the processing fee upfront to approve your loan. You should now acquire a written confirmation from banks if they guarantee to repay your processing charges if your loan application is refused. Since the processing fee for a personal loan is often non-refundable, a statement from the bank will help you recoup the return if the personal loan is not made available to you. Online lending companies often deduct fees associated with processing the loan before making a distribution. This results in a decrease in the amount of money you requested. Knowing the processing fees before applying for a personal loan is preferable to finding out about them afterward. A processing fee for a personal loan is often associated with submitting a loan application and the necessary paperwork. In most cases, the processing charge will be a fixed amount or a percentage of the total loan amount. Banks collect a processing charge to cover the cost of processing loan applications, legal procedures, customer service, document verification, and other services. What does a Loan Processor Do? Someone who processes loans or mortgages is called a loan or mortgage processor. They check the loan application to make sure the borrower has included everything needed, validate the information, and then pass it on to the underwriter for final approval. When you’re ready to apply for a loan, a loan officer will guide you toward the best option. However, the loan processor is responsible for everything that happens after you apply for a loan. To get a loan, you will need to fill out several forms, and the loan processor verifies the accuracy of your application and supporting documents. She may also check with other places, including your employer or a credit bureau, to double-check. [B-02] Conclusion For more information regarding the processing fee for a personal loan, contact Piramal Finance today. They will clear your doubts and apprise you with the information you need.

08-11-2023

Personal Loan

Pros and Cons of Personal Loan Prepayment in India

Personal loans are a widely known way to get money, whether for a wedding, a trip, a festival, or a new gadget. They are reliable, flexible, easy to get and don’t need any security. Even though getting the loan is simple, it is expensive. Due to the high EMIs and interest rates, many people with personal loans consider paying them off early or getting rid of them. You should conduct a cost-benefit analysis before personal loan prepayment to make sure you are picking the right choice. [B-01] This article discusses the pros and cons of loan prepayment. What is prepayment? When you make a loan prepayment, you repay all or part of your loan before its due date. According to the prepayment clause, the lender will charge a fee equal to a proportion of the total loan amount, or foreclosure fees on a personal loan, if you repay your loan before the set term. Personal loan prepayment fees vary from one lender to another. What are two types of prepayments? There are three types of prepayments. 1. Full prepayment Personal loans usually have a one-year lock-in period. After that, you can repay the entire balance and save on interest. Even if you pay early, you will still have to pay interest. The rates can vary from 3% to 5%. You might be surprised that some public and private lenders do not charge foreclosure fees on personal loans. If you need cash right away, you can get it without paying too much interest rates. 2. Partial prepayment You can make a partial prepayment if you have a large sum. A partial prepayment will make a dent in your loan payments. It can lower the principal amount you owe, lowering your monthly payments and interest. What are the pros of a personal loan prepayment? Paying off your debt before the tenure ends is a good way to ease financial stress. Let’s look at the pros and cons of prepayment. You save money on interest. When you repay a personal loan, you save capital income costs that you would’ve had to pay if you had kept the loan open for the whole tenure. Many people who take out a personal loan think the only way to save funds is to pay off the loan early. You can also save money by having to look for a personal loan with no prepayment fees. If you pay off your debts faster, you can save money on your EMI payments. You can use a loan prepayment calculator to determine how much interest you will save by paying off the loan early. You should, however, figure out prepayment fees and other extra costs (if any) when calculating how much you will save overall by choosing the prepayment option. It will make EMIs more affordable for you. Banks and NBFCs are more likely to give personal loans to people whose total EMIs, including those for existing and new loans, are less than 50% to 60% of their total income. So, if your EMI is more than 60% of your income, you have a lower chance of receiving a personal loan. You can improve your loan eligibility by paying off an existing personal loan and lowering your EMI/NMI ratio to between 50% and 60% of your monthly income. Some lenders also offer personal loans that can be paid off early without fees. It reduces the number of loans in the mix of credit. Since personal loans are unsecured, early payment will lower the percentage of unsecured debt in the credit mix. As a result, a greater proportion of secured loans may improve your credit scores, enhancing your chances of obtaining additional loans. To be on the safe side, you can take advantage of a personal loan with a no-fee prepayment option. What are the cons of loan prepayment? You have to pay penalty fees for prepayment. The RBI has told all lenders that they can’t charge fees for paying off personal loans with variable interest rates early. On the other hand, borrowers who get personal loans with a fixed interest rate need to pay prepayment charges. When you repay a personal loan, you may have to pay a prepayment penalty of up to 5% of the remaining principal amount. If you repay a personal loan with a fixed rate early, you might save less on interest. Many lenders will only let you make partial payments or prepayments on personal loans once you’ve made a few payments. It will affect your liquidity. For paying back the loan, you can use up all of the cash or investments you already have. But if you do that, you might not be able to manage a monetary emergency like a medical problem. In such a case, you may have to take out a loan with a higher interest rate if current investments are used beforehand. You must only choose the prepayment option if you have enough funds for an emergency. You should not use your existing investments to reach unavoidable financial goals. So, before you choose to foreclose or repay your loan early, you should think about these factors and carefully consider the prepayment penalties, extra interest, or whether or not it might help you. [B-02] Conclusion Personal loan prepayment is appealing to many because it will help them reduce their interest costs and total repayment load. But many lenders charge fees for repaying the loan early, which reduces your cash flow. It can be a drawback. On the other hand, you can easily repay your loans and save money on interest by refinancing them with a lender who has lesser interest rates. For more details, you can visit Piramal Finance and explore the personal loan options.

08-11-2023

Tax Savings

Income Tax Benefits that Senior Citizen can Continue Enjoying in 2022

Additional tax breaks, on top of those already provided by general legislation, are available to individuals who have reached the age of retirement. These eligible individuals may benefit from increased income tax exemptions, larger deductions, and simplified preparation of their tax returns when certain conditions are met. Let’s take a look at the various income tax benefits that are available to people who are in their golden age. [B-01] Increased threshold for basic exemption Tax rates are not adjusted for senior citizens; everyone pays the same amount. However, the standard income tax benefits that apply to people who are not seniors, seniors, and super-seniors are not the same. The maximum /income that can be exempted from taxation is Rs 3 lakh for seniors and Rs 5 lakh for super seniors. The cap is only Rs. 2.5 lakh for those individuals who do not qualify as seniors. Citizens below 60Citizens between 60 – 79Citizens above 60Tax ratesBelow Rs. 2.5 LakhBelow Rs. 3 LakhBelow Rs. 5 LakhNilRs. 2.5 Lakh to 5 LakhRs. 3 Lakh to 5 Lakh—-5%Rs. 5 Lakh to 10 LakhRs. 5 Lakh to 10 LakhRs. 5 Lakh to 10 Lakh20%Above Rs.10 LakhAbove Rs.10 LakhAbove Rs. 10 Lakh30% However, this will no longer be the case if they elect to switch to the new income tax benefits. Everyone, regardless of age, is subject to the same basic exemption level, Rs. 2.5 lakh. The tax brackets under the new system are as follows: Income slab for all individualsTax ratesBelow Rs. 2.5 lakhNilRs. 2.5 lakh to 5 lakh5%Rs. 5 lakh to 7.5 lakh10%Rs. 7.5 lakh to 10 lakh15%Rs. 10 lakh to 12.5 lakh20%Rs. 12.5 lakh to 15 lakh25%Above 15 lakh30% Disregarding one’s income tax returns Individuals 75 years old or older are excused from filling out an ITR. Those who get their interest and pension from the same financial institution qualify for income tax benefits. Those who receive their pension from a different institution are not eligible. It is required that the person in question have no other potential sources of financial assistance. However, before distributing the money, the bank must subtract the tax from the total amount. The senior citizen must provide the bank with a completed copy of Form No. 12BBA to receive the refund outlined in Section 87A of the Income Tax Act and the number of deductions outlined in Chapter VI A. No tax withholding is withheld on interest income Senior citizens may submit a statement to their tax withholding entities in Form No. 15H for tax withholding on income from post office deposits, public provident funds, provident fund withdrawals, LIC maturity profits, etc. For senior citizens who have paid all their taxes and have nothing left to claim, this eliminates the need to file a tax return or seek a refund. Seniors can make this declaration on Form No. 15H, even if their income exceeds the standard deduction amount. Moreover, for those aged 60 years and over, the maximum interest tax deduction on deposits is Rs 50,000 (Section 194A). For those who are not seniors, the limit is Rs 10,000. Up to Rs. 50,000 in interest may be written off Under Section 80TTB of the Income Tax Act, seniors may deduct interest earned on savings and fixed deposits up to Rs 50,000. If your annual income is more than Rs 50,000, you’ll be subject to the lower, senior citizen-friendly tax rates. Interest earned on term or fixed deposits is not eligible for deduction under Section 80TTA for those who are not seniors. Tax deduction under Section 80C According to this provision, elderly citizens and super seniors are eligible to deduct up to Rs 1.5 lakhs from their yearly gross income for allowable investments and expenses. Common assets that qualify for 80C deduction protection include: Financial commitments to create an equity-linked savings scheme (ELSS) over 5 years. You may put money away in various ways, such as the National Savings Certificates (NSC), the Public Provident Fund (PPF), and the Life Insurance Policy (LIP). Healthcare expenses and insurance premiums are tax deductible under Section 80D According to Section 80D of the Indian Income Tax Act, individuals under the age of 60 years are eligible to receive a tax deduction for up to Rs 25,000 of the cost of their medical insurance premiums. Nevertheless, the reduction of Rs 50,000 is a significant income tax benefit for senior citizens. Under section 80D, senior citizens are eligible for an additional deduction for medical expenses. Tax break increase for a certain illness Under Section 80DDB of the Internal Revenue Code, taxpayers are allowed to deduct the expense of treatment for certain diseases. This section discusses the medical treatment of serious diseases and ailments, such as cancer, neurological abnormalities, etc. Deductions for medical expenses are possible up to Rs 1,00,000. The money from a reverse mortgage doesn’t have to be paid in taxes By permanently mortgaging their houses, elders may receive monthly payments via a reverse mortgage arrangement. A senior citizen retains all rights of ownership and possession. When the borrower dies, the lender will sell the property and use the proceeds to pay off the debt plus any accrued interest. The proceeds from the sale are distributed to the rightful heirs. A senior citizen who receives a lump-sum payment now or in instalments throughout their lifetime from this plan will not be subject to federal income tax on that amount. Prepayment of taxes is not required An individual must make an advance tax payment if they anticipate having a tax liability for the subsequent fiscal year that is more than Rs 10,000. If senior citizens have no revenue from a company, they do not have to make an advance tax payment. They are accountable for deducting and paying taxes on their earnings. This is another one of the income tax benefits. [B-02] Summing up When paying taxes, seniors are considered to be 60 years or older but still younger than 80. Those who have reached the age of 80 and beyond are considered “super senior citizens”. These are some income tax benefits these seniors and super citizens may enjoy in their golden years. To learn more about their benefits, you may visit Piramal Finance, which will provide you with all the necessary information.

08-11-2023

Tax

Tax on profit from commodity trading in India

Online commodity trading has become very popular lately. There are many reasons why. Commodities can help protect you from inflation. They also allow you to spread your investments in different ways. Investing in gold or silver is also a smart way to secure your financial future. However, knowing the tax on online commodity trading is essential. This helps to make educated investments and trades. This is because you have to pay taxes for most high-return investment products in India. In the following sections, you’ll learn all there is to know about the commodity transaction tax. You will also learn how it might affect your earnings in the commodities market. [B-01] Commodity Transaction Tax: A brief overview Earlier, the government didn’t levy any taxes on commodities trading. This was in contrast to the trading of stocks and mutual funds. In 2013-2014, Mr. P. Chidambaram was the Finance Minister. He suggested a tax on the trading of commodities. It is similar to the trading of securities. He named this new tax the Commodity Transaction Tax (CTT). He applied it to all non-agricultural commodity transactions. This tax is similar to the Securities Transaction Tax (STT). You must pay this on equity investments. The CTT was 0.01% of the daily trading volume and applied to stock futures. The buyer or seller of the commodity pays this tax. This depends on the type of transaction. There was a proposal to increase the tax in 2008-2009. But the government did not implement it. This was because the Prime Minister’s Economic Advisory Council rejected it. A tax on speculative and non-speculative trading in commodities income Major commodity exchanges in India include the Multi Commodity Exchange (MCX), the National Commodities and Derivatives Exchange (NCDEX), and others. You can also trade futures and options contracts in the commodity market. The trader selects the contract type which determines the applicable commodity trading tax. Commodity traders make two main types of trades: Speculative trading: It is the same as day trading in the stock market. In speculative trading, a trader buys a commodity in the morning. They sell it in the evening. They do this just before the market closes for the day. These transactions are considered speculative. They are cash-settled. They are not delivery-based.Non-Speculative Trading: Non-speculative commodity trading is like positional trading in stocks. It involves holding the position for at least one day. Non-speculative trade transfers ownership from one buyer to another. Points to remember: Trading profits are subject to taxation in India. It doesn’t matter if they are speculative or not. You have to pay the taxes at the same rate as other business income. The taxpayer’s income tax bracket determines the taxable rate. Trading commodities is not like trading stocks. This is because of the structure of tax laws. In certain cases, you may be liable to pay both short-term and long-term capital gains taxes on stock trades. If you sell shares within a year of buying them and make a profit out of it, you have to pay Short-Term Capital Gains Tax (STCG). Long-term capital gain is the sale of an investment held for more than a year. The standard short-term capital gains tax rate in India is 15%. The long-term capital gains tax rate is just 10%. The stock and commodity markets are vastly different. Because of this, it is easier to calculate and pay taxes on gains from commodities than stocks. When you have losses from a declining investment, it is difficult to calculate the taxes. It is important for traders to understand the type of trading they are doing to determine the tax implications. You can consult a tax expert or financial advisor. This will help you get a better understanding of the tax implications of commodity trading. The next section talks about this topic in depth. How to Deduct Trading Losses and Trading Gains When Paying Taxes on Commodities? Profits from online commodity trading are subject to income tax at your normal rate. There is no tax on the losses. When paying taxes on commodity investments, it’s important to know how to deduct your trading losses and gains. For this, you’ll need to calculate your net profit or loss for the year. You can do this by subtracting your total trading losses from your total trading gains. If your net result is a profit, you’ll need to pay taxes on it according to the applicable tax rate. On the other hand, if your net result is a loss, you can carry it forward to the following year and deduct it from any future gains. The Indian Income Tax code permits taxpayers to deduct business losses from their taxable income. But, the law handles losses from speculation differently from those arising out of other types of investments. You can carry forward the speculative trading losses for 4 years. This starts with the fiscal year when you first suffered a loss. But you can’t make up for speculation trading losses with a steady income. If you made INR 50,000 in non-speculative transactions and INR 50,000 in speculative trades, you cannot claim a net profit of zero. This is because you cannot balance the speculative loss with the non-speculative gain. In this case, you should carry forward the speculative loss. You can use it to offset future speculative profits. This will reduce the taxable amount of the latter. You can balance out speculative profits against losses from other areas of your portfolio. You can also deduct non-speculative losses against either speculative or non-speculative profits. You can do this for up to eight years. [B-02] Conclusion The exchange of commodities is subject to two different forms of taxation. The first is the Commodity Transaction Tax. The second is the income tax. To counteract this, however, you might claim under the appropriate conditions. You must also subtract your gains from your losses. You can only deduct commodity investment losses from futures and options profits. And you can deduct the other losses from both types of profits. Visit Piramal Finance now that you know everything there is to know about commodity investment taxes and the CTT. Click this link to know more about its offerings like personal loans and credit cards.

08-11-2023

Tax Savings

What you need to know about tax benefits of nps in India?

National Pension Scheme (NPS) is an optional, long-term investment strategy for retirement. The Central Government along with the Pension Fund Regulatory and Development Authority (PFRDA) are in charge of it. In this article, we will discuss in detail the tax advantages offered by NPS. [B-01] What is National Pension Scheme (NPS)? The Central Government launched the National Pension Scheme as a social security programme for all individuals. However, those performing any sort of military service are not included in this scheme. The programme asks for a periodic contribution to a pension account during your employment tenure. You can withdraw only a specified amount of investment before retirement. The remaining amount will be credited to your account on a monthly basis after retirement. For those employed in the private sector, there are many Tax benefits of NPS as it offers deductions under Sections 80C and 80CCD. Moreover, this account is also transferable in cases of job switches. Who should invest in the NPS? People who are looking to make a retirement plan and are low on their risk appetite must consider NPS as an investment option. Having a steady pension in a methodical manner post-retirement has a huge impact on your life. Salaried individuals who look forth to saving taxes and investing more can consider this plan under 80C. Features of NPS Returns/Interest – NPS invests a portion of money in stocks, which allows it to provide a higher return when compared to PPF. This programme has been in place for more than ten years and has thus far produced annualised returns of 9% to 12%. Risk Assessment – The upper margin of equity exposure in the National Pension Scheme is between 50-75%. For government workers, it is set at 50%. There is also an attached condition that the equity component will decrease by 2.5% annually after an investor turns 50 years of age. However, the margin of exposure in equity cannot fall under 50% in any circumstance. Hence, investing in NPS stabilises the risk-return ratio of the investors, protects their corpus and also provides a steady return. Tax benefits of NPS The employee’s and employer’s National Pension System contributions are exempt from tax up to Rs. 1.5 lakh. You can claim the tax benefits of NPS under Sections 80CCD(1), 80CCD(2), and 80CCD(1B) of the Income Tax Act. Self-contribution is covered by Section 80CCD(1) of the tax code. The maximum deduction for salaried workers is 10% of their pay, whereas the maximum deduction for self-employed people is 20% of their gross income. Employer contributions to NPS are covered by Section 80CCD(2), which is also a part of Section 80C. Self-employed people are not eligible to get this benefit. You may only deduct up to 10% of your basic income plus Dearness Allowance or the employer’s NPS contribution, whichever is greater. You may claim Rs. 50,000 as an add-on NPS tax advantage for self-contributions made under Section 80CCD(1B). Therefore, under NPS, people may claim tax benefits of NPS of up to Rs. 2 lakh. Things to remember: Tax savings: Those in the highest tax category of 30% can save an additional Rs. 16,000 in taxes thanks to the extra Rs. 50,000 deductions on NPS. Employees can save over Rs. 10,000 in the 20% tax band, and Rs. 5,000 can be saved by those in the 10% tax bracket. Opting out of EPS: The Finance Minister intends to provide employees with the choice to forego EPF and invest in NPS instead for their retirement. Tax on withdrawal: There hasn’t been a prolongation of the tax benefits for NPS withdrawals. As a result, contributions to the NPS up to Rs. 1.5 lakh and the interest received are tax-free, but the amount withdrawn is not. Extra tax saving options: The total deduction allowed under Sections 80C and 80CCD of the Income Tax Act would now be up to Rs. 2 lakh, thanks to the additional Rs. 50,000 deduction on NPS. The cap for deductions under section 80CCD, including contributions to the NPS, has also been raised from Rs. 1 lakh to Rs. 1.5 lakh. This should provide investors with more possibilities for tax reduction in turn. Withdrawal options: Once you are 60 years old, you will have the option of leaving NPS. You must use at least 40% of the total pension wealth to purchase an annuity for your monthly pension. The balance is paid as a lump sum. The annuity service providers are in charge of providing a consistent monthly pension once the subscriber leaves the NPS. NPS structure: Tier-I and Tier-II accounts make up the NPS scheme: Tier I – This is a non-withdrawable account intended only for retirement. Contributions made to this account are tax-deductible. Tier II – Only individuals who have an active Tier I account may start a voluntarily withdrawable Tier II account. You will have the option of making withdrawals from your account as needed. This works in the same fashion as a normal bank savings account. Minimum deposit: While the minimum contribution is Rs. 500 in a single deposit, the minimum deposit for a Tier-I account is Rs. 6,000. Opening an NPS account: To offer NPA-related services, the majority of banks are registered with PFRDA. Anyone between the ages of 18 and 60 is eligible to open an NPS account. Online tracking is available for both transactions and the current fund value. Portability: Once your NPS account opens, you will receive a PRAN. This is a distinct integer that never changes. You have the choice of portability with NPS between locations and jobs. [B-02] Conclusion Consider investing in the NPS scheme for the advantages mentioned above. Understand your risk tolerance and investment objectives before making a decision. However, if you want more equity exposure, consider investing in some other options. Read more at Piramal finance about NPS and don’t forget to explore their vast range of products and services.

08-11-2023

Know More

Everything you need to know about personal loan processing fees and charges

Need to use your property as security for a loan? Find out who qualifies for the interest rates the loan against property and how to get them. Know the lender’s processing and closing fees before applying for this loan. These costs include underwriting, credit and property appraisals, legal fees, title searches, and document preparation. Here, we’ll talk about these things to help you understand them better! [B-01] What is the loan against property? Property loan governs personal and natural land. The property includes legal rights to resources like land and personal items like intellectual property. Contract loan allows property transfers and secured debts, while tort loan protects ownership from harm. Loans against property eligibility, a standard mortgage option, can finance personal or professional needs for employed and self-employed people. To get a loan, a person must pledge commercial or residential property as collateral. The lender holds the asset until the loan’s interest and amount are paid. Interest rates on loan against property Loans based on property Loans against property interest rates are the most attractive financial tool for people who need money. The amount and length of the loan affect the interest rate. Borrowers can choose between rates that stay the same or change over time. The market affects an adjustable rate, while a fixed rate stays the same for the whole loan. We now know how home loans work. So we need to figure out who owns what. Lenders make changes to this loan. Market and bank rates place it between 10-15%. 9% per year. Real estate loans from banks usually cover between 70% and 90% of the property’s current market value. You can pay back the loan in manageable monthly payments for up to 15 years. Use this money however you want. Our 15-year-old team will find a bank or NBFC with low interest rates for you. We look at your profile and make recommendations for banks and NBFCs. Factors influencing the interest rate on loans against property The length of time it takes to pay back an interest rate on a loan against property is the main thing that makes a big difference in the interest rate, which is what the bank charges the borrower. When the time between payments is short, interest rates are high. Next, if you want to get a loan against properties at a lower interest rate, your credit score must be at least 700. The lender’s interest rate is based on the property’s kind and market value and the applicant’s profile. The interest rate that the bank charges is also based on factors including age, profession, salary, etc. Eligibility of applying for a Loan against Property First of all, you have to know about the eligibility criteria for a loan against property. Let us know more about it. Whether it be a commercial or residential property, it must be located in India. The maximum age must be 65 years, while the minimum age of the applicant must be 25 years. Salary or self-employment are two possible jobs. (Private or public professionals must share the experience of a minimum of 3 years in the company .) Net income must be Rs. 25,000 monthly. Also, specific documents become necessary to submit while applying. These documents involved are the latest salary slip for applicants who work on a salary basis, the previous three months’ bank account statements, the original PAN card and Aadhar card, and a copy of the documents of the property we are talking about. Finally, the IT returns of the salaried applicants arrived. More papers are also involved in the loan application and processing process. How does the processing fee work? The borrowers must pay a non-refundable, one-time charge to the lender when submitting a loan application. Typically, processing fees amount to 7% of the loan amount. How can I apply for a loan secured by property? The client must go to the financial lender’s website and submit an online loan application. The lender’s customer service department will contact the applicant and ask for the delivery of the necessary paperwork. The lender will next check the given documents, and after that, they will inspect the applicant’s property. The loan amount will be added to the customer’s bank account if, indeed, the application is approved. Following the five easy steps, you can apply for a loan against the property. Benefits of a loan against property Compared to unsecured loans, secured loans often have lower interest rates. Additionally, your chances of receiving a loan with a low-interest rate increase if you have a strong credit score and a practical credit history. When a loan is secured by real estate, the borrower still retains ownership of the asset. The right to your property does not change when you use it as security for a loan. You will be unable to pay back the loan, and this also enables you to look into selling a property. You won’t have to pay any fines for pre-closing the loan if the loan you have obtained has a variable interest rate. However, if your loan had a set interest rate, you would only have to pay a small sum. The majority of loans secured by property have adjustable loan repayment terms. You can get a loan with a 20-year repayment period, depending on the lender you select. Understanding the benefits mentioned above, you can now decide to apply for a loan for your property. [B-02] Summing-up: This essay explains how to apply for a loan against property, including administrative fees, and the interest rates on the loan against the property. The explanation is based on extensive research to help you choose the best interest rates on the loan against the property. Also, it highlights several advantages and disadvantages while raising a fund. Finally, we can say that we get a diverse getaway of info on what to do when you are applying for a loan against property interest rate with some of its benefits.

08-11-2023

Health Insurance

Things to Consider While Renewing Your Health Insurance Policy

You often recharge your smartphones to avoid having your services interrupted, right? In the same way, you must renew your health insurance policies to keep them active. Our health insurance could lapse if we don’t renew it during the grace period. After its expiration, you will have to go through the trouble of purchasing a policy once again. Thus, it’s crucial to renew your health insurance policy on time. Additionally, there are several things you should consider while doing so. Here are the six important things you should consider while renewing your policy: [B-01] 1. Don’t overlook the renewal date. The renewal date is one of the most important things to consider while renewing your health insurance policy. Once the pre-fixed term of your health insurance policy expires, you must renew the term. Renewing the policy allows you to enjoy continuous health insurance benefits. Although the insurer reminds you of the renewal date, the insured must not overlook it. The insurer provides the insured with a grace period of 15–30 days in case you forget to renew your policy. Per the rules, the insurer is not liable to charge extra fees during the grace period. Health insurance policies lapse if when they are not renewed before or during the grace period. If the policy lapses, it cannot be renewed. Such lapses are risky, especially for those with medical conditions. 2. Examine your changing healthcare needs. Healthcare costs increase as per your age. Hypertension and diabetes are very common illnesses these days. Also, the risk of serious diseases increases with your age. At the time of policy renewal, you must tell the insured about the additional diseases that you didn’t have before renewal. This might increase your premium, but it will insure you against future health conditions. Also, health insurance policies should change with the changes in an individual’s life stages. For instance, if you are married and have a child. You should get your new family members covered under your health insurance. With changing health insurance needs, you must upgrade and renew your policy from time to time. Also, if your current insurer does not meet your present and future health insurance needs, you must shift to another insurer. Choose the best health insurance policy that fulfils your needs at an affordable premium. 3. Increase the sum assured under the policy. After reviewing the above-mentioned health insurance needs, you are certain that an increase in the sum covered is necessary. And this can only be done at the time of renewal. And if the proposed upgrade is large, the insurer may impose restrictions such as no prior claims and the need for medical exams. Be aware that the waiting periods will apply once again to the extra share of the insured. Thus, when it’s time for policy renewal, you should be ready and aware of that. 4. Check for changes in policy terms and conditions. The Insurance Regulatory and Development Authority of India (IRDAI) looks for the insurance sector. According to IRDAI, insurers can change the terms of a policy with its approval. However, they must communicate those changes with their customers 90 days in advance. As a responsible policyholder, you should keep your eyes open. Before the renewal of your health insurance policy, discuss the changes in the policy with your advisor. Move ahead with the policy renewal if the changes in the policy provide you with the desired benefits. Or, choose another policy that provides highly valued benefits at the same premium. 5. Have a look at the premiums offered by competitors. There is a lot of competition in the insurance sector. Due to this, many competitors try to offer competitive premium rates. You should also compare the premium rates of other competitors of the same policy offering similar benefits. Nowadays, comparing the premium rates and benefits offered by different insurers is very easy. You can do this by using various comparison tools available online. You can compare the different health insurance policies in terms of Benefits. Claim settlement ratio. Reviews. Premiums. You must rethink your policy if it does not offer the benefits as per the premium. Or, if it charges a higher premium as compared to other health insurance policies. 6. Save the receipt and inform your family member about the renewal. Notify your family member about your policy’s terms. So they are aware of the changes and are not surprised when the time comes to file a claim. Tell them where you keep the insurance papers, cards, etc. Follow up with the third-party administrator (TPA) to get the updated cashless identity cards issued. As you’ll be deducting the premium from your taxes. Printing out the receipt and keeping it in your tax file for your records and future use is a good idea. [B-02] To Sum It Up. Most people believe they have done everything after buying a health policy. But this is an incorrect belief. Buying health insurance policies is as important as renewing them properly and promptly. Always remember your renewal date. Also, consider your changing health insurance needs. And ask for an increment in the sum assured. Before renewing your policy, check for any changes in the policy’s terms and conditions. Compare the premiums offered by other insurers or competitors. Keep your receipts at hand. Inform your closest family members about the policy changes. Change your insurer if you are unsatisfied. Choose the best health insurance policy with reasonable policy terms and the benefits offered. Visit our website to find more useful and informative blogs.

08-11-2023

Personal Loan

How security is the important factor to get personal loan

Personal loans may be a quick way to receive much-needed cash. This can be used to pay for home renovations, unexpected medical expenses, starting a business, or a holiday. On the other hand, getting a personal loan from a bank includes the client verification procedure after the loan application. Unlike mortgages or vehicle loans, personal loans are often not backed by a guarantee. So lenders must check the eligibility requirements before accepting them. Lenders check your credit score, income, existing EMIs, occupation, age, and repayment history when considering your application for a personal loan. [B-01] About Personal Loan When there is a need for rapid cash, a personal loan is the most outstanding alternative. It has the fastest disbursal time compared to other loans on the market. Given how simple it is to obtain a personal loan, a statement from the RBI in March 2021 revealed that personal loans had grown by 13.5%. (Y-o-Y). This shows that more people are interested in personal loans to cover unexpected needs and make ends meet. Remember that credit risk evaluations are performed before the lender approves a loan. Let us learn more about credit risk assessment and the most important aspects that influence credit risk in personal lending. Loan Risk The risk of loss a lender bears due to a borrower’s inability to repay any loan is referred to as “loan risk.” Loan risk assessment is a method in the personal loan industry that shows whether or not an individual should be granted a specific amount of credit. This approach considers the risk that the lending party will have to bear if the loan’s principal and interest are not paid. Since the pandemic outbreak and the ongoing loan crisis, credit risk assessment has taken centre stage for financial institutions. Loan risk assessment is a complex procedure for most financial institutions, as it involves reviewing the bank’s capital and loan reserves simultaneously to reduce losses caused by bad loans. With regulators demanding greater openness, banks must do extensive background checks on their clients and appropriately calculate the related loan risk. The problem in personal lending is accurately analysing whether or not an individual can arrange for repaying the borrowed money. The loan amount, payment schedule, and loan tenure are all aspects that are checked. While improving people’s access to credit can benefit the economy, it’s critical to consider the loan risk involved. When banks fail to undertake due diligence and give loans without a sufficient credit assessment, loan assets become non-performing assets (NPAs), resulting in losses to lending institutions and, eventually, the broader economy. Factors Affecting Loan Lending Scope: The ability of the borrower to repay the loan is essential. The customer’s employment history, present job stability, and income quantity are all crucial indications of the borrower’s capacity to repay the existing loan in the case of personal lending. A well-balanced revenue and spending connection reveal not only the borrower’s financial capability but also his ability and judgement in business management. Borrowers who have college-going children or who are owners of small firms with fluctuating income flows are termed “low capacity” borrowers. The “debt-to-equity” ratio checks whether the borrower can produce the necessary funds to repay the loan. The borrower’s capacity is calculated by comparing current income (before taxes) to recurrent obligations. Assets: This element is used to determine the net worth of the person who has asked for a loan. It reflects the borrower’s total assets, including savings and investments in jewels. A high capitalisation rating shows that the borrower is well-capitalized to absorb any unexpected losses. While the borrower’s current income is utilised to repay a personal loan, the borrower’s capital is regarded as an extra reserve to fulfil demands in unanticipated situations. Conditions: When determining the risk that the lender will have to bear, external factors such as the economy, market, and industry circumstances are vital to examine since they will have an indirect impact on the borrower’s ability to repay the loan. The goal is to establish if the borrower can adjust to changing situations and be flexible enough to repay the loan during its duration. Security: Security is the borrower’s assets that can be pledged in their name as security for the loan given. This might include permanent assets such as the borrower’s land title and financial assets such as bonds. Security is only guaranteed for secured loans, not unsecured loans such as credit cards. We need to realise that collateral will not be utilised to evaluate a borrower’s ability. This is because collateral is only liquidated when the borrower fails to repay the loan in the worst-case scenario. Nature: Character is determined by the borrower’s moral integrity. It all boils down to the borrower’s willingness to repay the loan. It determines if the borrower will fulfil the credit obligation. The most important part of determining a borrower’s creditworthiness is character. The borrower’s repayment and credit management histories are examined to establish the borrower’s inclination to repay the loan. If there are signs of default, it shows that the borrower has been inattentive or careless in the past. This shows a negative character, resulting in lower scores. [B-02] Conclusion Credit scores are sometimes used to screen loan applications along with these five loan risk assessment parameters. These factors are essential in establishing a framework and objectives that will allow lending institutions to judge the borrower’s eligibility for a loan. Loan risk departments of lending institutions make decisions with the help of data. This helps them with loan risk and in arriving at reliable estimates of the borrower’s creditworthiness. There are no complex rules governing how lenders weigh these features. Different lenders may value one feature more than another. Online lending platforms may prioritise character and capacity, whereas banks prioritise securities. Fast, practical, and easy to secure, personal loans from recognised firms like Piramal Finance can help cover unexpected expenses or assist with your home upgrades, unforeseen medical expenses, starting a business, or even going on vacation without much fuss.

08-11-2023